NYSE President: We’re Somewhat Paranoid About Market Risk

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New York Stock Exchange President (NYSE) Thomas Farley spoke with FOX Business Network’s (FBN) Maria Bartiromo during Opening Bell with Maria Bartiromo about the market reaction to geopolitical events. Farley said, “the events we saw yesterday underscore a market axiom” and that “We’re somewhat paranoid about market risk.” When asked about winning the Alibaba IPO Farley said “I’m thrilled that they selected the New York Stock Exchange” and that “They’re a market leader.” Farley also commented on where he sees action in the listings saying, “We’re winning two-thirds of technology listings.”

NYSE President on market reaction to geopolitical events:

“Well, our job at the New York Stock Exchange is to be open no matter what the volatility environment. I think the low volatility environment we’ve been in has perhaps lulled some of us into a false sense of security and the events we saw yesterday underscore a market axiom, which is that there is risk in the world. There is asymmetric risk and people are going to want to manage that risk. And so we need to be open, come rain or shine metaphorically. Yesterday was our fifth largest options day of the year. And if you go up to our parent company or Intercontinental Exchange, we actually had all-time record oil volumes two days ago and a heavy day in our credit default swaps business. We need to be available so that people can manage risks when there are turbulent times.”

NYSE President on where he expects the most volatility in volume:

“I can tell you, there’s a reason why I work in an exchange and I’m not an investor.  I don’t focus on predicting the future; I focus on making sure that we’re open, as I said earlier, come rain or shine.  We’re somewhat paranoid about market risk, an asymmetric market risk like we saw yesterday.  And so we need to be prepared when there’s a burst of activity, whether it’s volume or volatility.”

NYSE President on where he sees the action on the floor of the NYSE

“The action we’re seeing is in listings. It’s a great year. In terms of IPO’s we’re on a near-record pace. We have two exciting IPOs going on in the building today. We’re winning about two-thirds of all qualified listings. We’re winning two-thirds of technology listings, so that’s where there’s the most activity where I’m spending a good deal of my time.”

NYSE President on what he’s expecting regarding the Alibaba deal:

“So Alibaba, first of all, just say I’m thrilled that they selected the New York Stock Exchange, it’s a great company. I was involved in the process and I’ll just tell you that they went through an extremely deliberative process to decide which exchange to list on. I’m thrilled that they picked us. They’re a market leader, whether or not others will follow them, I won’t speculate on, but I’m really excited to have them.”

NYSE President on whether he sees investors ignoring some geopolitical events:

“Yes, the history of markets in this country is there’s really two dynamics in play, one is fragmentation and consolidation in terms of the venues, where risk is exchange and others is periods of volatility and lower periods of volatility.  And you never know exactly what the tipping point will be.  I think yesterday was a pretty extraordinary day because of the confluence of events.  But again, we’re just focused on making sure we’re available so that investors can come to the New York Stock Exchange and the IntercontinentalExchange to exchange risk, no matter what the asset class.”

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