LONDON, March 1 (Reuters) - Markets handled their recent bout of extreme share price volatility without widespread fallout but there is a need to remain vigilant, Britain’s top markets regulator said on Thursday.
Andrew Bailey, chief executive of the Financial Conduct Authority, said the volatility could have been exacerbated the “herding effect” of several big players closing out leveraged volatility based investment strategies.
Falling share prices were not accompanied by major fallout elsewhere in markets, he said. The system stabilised and the episode was short-lived.
“There are, however, already some indications that short volatility positions are beginning to be re-established,” Bailey said in a speech.
Reporting by Huw Jones; editing by Jason Neely