Will Trump shut down the stock market? 4 questions answered
Financial markets across the globe have plunged repeatedly in recent weeks over concerns about the growing economic toll from the coronavirus pandemic, on some days falling over 10%. This has raised the question of whether governments should shut down their stock markets until the panic subsides. We asked Jonathan T. Fluharty-Jaidee, a finance expert at West Virginia University, what measures financial exchanges have to stem panic selling and whether he believes a shutdown would be a good idea.
1. What measures prevent a free fall in prices?
Most financial markets around the world have so-called circuit breakers that are triggered when overall prices drop by a certain magnitude.
For example, if the price of the Standard & Poor’s 500 index falls 7% from its previous close, trading of a...