Shameful day, LME
Corporate reactions to the period leading up to the funeral of Queen Elizabeth II, and to the day of the funeral itself, are necessarily mixed. Some we can understand, while at others – like the supermarket chain Morrisons who have decided their mark of respect should be to silence the ping noise of the automatic checkout machines, or the Met Office, who have decided that respect is shown by reducing the weather forecast you broadcast – we can rightfully snigger. Some things, though, do seem instinctively right and honourable and decent, regardless I think of one’s personal position on the constitutional monarchy. So the London Stock Exchange will close on Monday September 19th, the day of the funeral itself, as will the bullion market, presided over by the LBMA, and the London foreign exchange markets.
Strangely, though, and in a move that I suspect would have the old founding fathers, Rudolf Wolff, Charles Davis, Henry Bath and the rest – honourable, decent Victorian gentlemen – turning in their graves, the London Metal Exchange has elected to remain open on the Bank Holiday declared to mark the Queen’s funeral. I think this is a mistake; frankly, I think it shameful. One of the City of London’s major international institutions – one of that group of financial entities that has made London the international financial capital that it is – doesn’t seem to feel it appropriate to close, with all the others, on what will for sure be the biggest day of international mourning for more than a generation; monarchs, presidents, heads of state of all political and cultural backgrounds will make the tip to London to pay their respects – and the LME won’t close for the day.
And then, let’s have a look at what they have said.
“Reflecting the international nature of the LME’s market and taking into account the potential impact of the short notice from an operational risk perspective, the Bank Holiday will constitute a Business Day for the purposes of the LME and LME Clear Rules, and the markets themselves will remain open.” So, short notice operational risks. Mmmm…….the people putting out that press release are the same ones who cancelled valid trades retrospectively when seemingly somebody didn’t like the price earlier in the year. That was short notice. I suspect that many of us will recall occasions when, for one reason or another, prompt days have been rolled together, without excess “operational risk”. A closure could have been managed, particularly since I suspect by far the majority of market users would have been supporting it. The LME has a lot in common with the bullion and FX markets – they seem to have no problem, or if they do, they regard it as important enough to manage it.
I’m sorry to say this, but I do feel this is another nail in the coffin of the LME’s once-cherished reputation, already tarnished by the trade cancellations earlier this year. I don’t believe those founding fathers would have behaved like this.