By Chris Prentice and Pete Schroeder
WASHINGTON, Feb 28 (Reuters) - Top U.S. regulatory officials are expected to discuss the economic implications and financial market impact of a potential coronavirus pandemic at a meeting next Wednesday of their systemic threat panel, three sources told Reuters.
The impact of the fast-spreading coronavirus is likely to be high on the agenda of the Financial Stability Oversight Council’s deputy-level meeting, which had been scheduled before the recent dramatic sell-off in the stock markets, the sources said.
The council, which is led by the Treasury Department and staffed by major financial regulators including the Federal Reserve, is tasked with identifying and monitoring risks to U.S. financial stability.
The council has regularly scheduled meetings of principles and deputies to ensure agencies tasked with oversight of different markets remain in touch.
“Coronavirus is likely to be on, or at the top of, the agenda,” a U.S. official said. “I don’t think regulators are panicking yet. What’s clear is that all of the agencies are talking to one another about this at a staff level.”
Wall Street on Friday closed out a week of losses on a deepening selloff on fears that the fast-spreading coronavirus could lead to a recession. The S&P 500 benchmark stock market index suffered its biggest weekly drop since the 2008 global financial crisis. As the world prepares for a likely pandemic, investors dumped equities and moved to the safety of U.S. Treasuries.
“The next seven days or so are very important in determining, if things don’t get better. That’s when the conversation about potential levers to pull becomes more real,” the official said.
The tools that regulators could roll out to address a prolonged market crisis are somewhat limited, and one of the sources said the next week will be a key test on whether regulators move from simply monitoring the markets to action.
Regulators are already speaking with exchanges and registrants to ensure orderly operations of financial markets, the source said. (Reporting by Chris Prentice, Pete Schroeder and Katanga Johnson; Editing by Sandra Maler and Leslie Adler)