Mnuchin attempts to reassure investors after another tough week for financial markets

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  • US Treasury Secretary Steven Mnuchin has released a statement in attempt to help calm investor nerves after another tough week for financial markets.
  • Mnuchin spoke to large US banks on Sunday. Each confirmed they have “ample liquidity available for lending to consumer, business markets, and all other market operations”.
  • Mnuchin will talk with senior regulators from the US Federal Reserve, SEC and US CFTC on Monday to discuss “coordination efforts to assure normal market operations”.

With a partial shutdown of the US Government now underway and volatility elevated in financial markets, US Treasury Secretary Steven Mnuchin has released a statement in attempt to help calm investor nerves.

Mnuchin said that after speaking to CEO’s of the nations largest banks on Sunday, each confirmed they have “ample liquidity available for lending to consumer, business markets, and all other market operations”.

They also reassured him that they have not experienced any clearance or margin issued and that the markets continue to function properly.

In what in obvious move to shore up investor sentiment, Mnuchin said he will convene a call with senior regulators from the US Federal Reserve, SEC and US Commodity Futures Trading Commission on Monday to discuss “coordination efforts to assure normal market operations”.

“We continue to see strong economic growth in the United States economy with robust activity from consumers and business”, Mnuchin said in a statement posted on Twitter.

The move followed another steep decline in US stocks on Friday with all major indexes tumbling more than 1.8% to fresh multi-year lows. The VIX — a measure that uses options pricing to gauge expected US stock market volatility in the month ahead — also closed at the highest since February this year.

Whether Mnuchin’s statement will help appease or add to investors concerns is debatable, especially given fears over market functionality were not particularly acute despite increased volatility.

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