U.K. money managers saw a decrease in available liquidity during the first wave of the coronavirus pandemic starting in March, according to the U.K. Financial Conduct Authority.
In a survey of 23,000 firms, the U.K. financial services watchdog found that the liquidity available to investment management firms to trade and invest declined by 2% from February, when the pandemic first began, to May and June, when its impact was being fully felt. Liquidity available to insurance intermediaries and brokers fell 30%, while payments and online money platforms saw an 11% decline in the period.
Conversely, retail investments and retail lending sectors saw an 8% increase in available liquidity and wholesale financial markets saw an 83% increase, according to the FCA.
"We are in an unprecedented — and rapidly evolving — situation. This survey is one of the ways we are continuing to monitor the potential impact of (the) coronavirus on firms. A market downturn driven by the pandemic risks significant numbers of firms failing," Sheldon Mills, executive director of consumers and competition, said Thursday in a news release.