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February 28, 2020

RELEASE: Better Markets’ Statement on Market Conditions and Correction

Friday, February 28, 2020
Contact: 202-618-6433,

Washington, D.C.  –  Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement in response to numerous inquiries regarding the current market conditions and correction:

“While we don’t usually comment on market conditions, numerous inquiries have prompted us to make this statement.  Some have claimed, among other things, that poor liquidity has been a major driver of the selloff and that is due, in part, to financial regulations impacting market makers.  There is no evidence of that, and it appears to be nothing more than the usual suspects using the unusual market conditions as a pretext for attacking rules they have always opposed.

“On the one hand, you could say the historically unprecedented speed of the correction shows that whatever market makers’ duties might be, they are just running for the exits like everyone else.  On the other hand, you could say that they are doing the best they can under the circumstances given the market conditions and that the markets might have fallen further faster otherwise.

“But the fundamental truth is that no one is going to catch a falling knife when no one knows how big the knife is or how fast or far the knife is going to fall or, for that matter, whether it is the first or the last knife to fall.  And, truthfully, we do not want taxpayer-backed banks doing that anyway.  Pulling assets onto their balance sheet that could continue to drop in value to some unknown extent happened during the 2008 financial crash, which made everything worse.  That would then add a whole new level of concern to the markets at the worst possible time: the stability of the banks themselves.

“All this gets to the more fundamental point: markets and investors hate uncertainty, and they are now faced with two high levels of historic uncertainty: first, a pandemic in all but name and, second, the appropriately low confidence and trust in the administration’s response thus far, which appears disconnected from reality and to be focused on a political solution rather than dealing with a genuine crisis that is literally killing people.

“Finally, the Federal Reserve should not overreact and precipitously cut rates without additional information to conclude that such action would achieve an appropriate, data-driven policy objective.  There is little basis to believe that the market needs the kind of liquidity a rate cut would provide.  Moreover, such a move would not restore confidence more than it would likely feed the panic while expending what few bullets the Fed has left in its arsenal, which itself would feed the panic.  Cutting rates would likely only provide a short-term trading opportunity for a few of the biggest Wall Street firms but would change nothing fundamental.

“The market needs high quality, trustworthy information from authoritative sources, real leadership and measured data-driven decision-making.  That would likely set the market floor.  Then, as reliable facts are gathered, disclosed, discussed and digested about the extent of the pandemic, the actual preparedness of the country, the business implications in the US and around the globe, and related matters, markets and investors can begin to reliably size the risk, establish their risk tolerances, and act accordingly, changing as new reliable information becomes known.  But even with the floor set, only trustworthy leadership and concrete, collective and bipartisan political action to respond decisively and appropriately in the short and long term will enable the markets to regain their footing on more than a temporary, short-term basis.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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