Viewpoint - Confessions from the Laundry Room

27 May 2020


12,403 days. That’s the estimate of the number of times that Bill Murray painfully relives the same day as TV weatherman Phil Connors in the movie Groundhog Day. This estimate is based on the days recounted in the movie plus other days Phil references being shot, poisoned, frozen, hanged, electrocuted, burned, and stabbed. Throw in the time needed to become an expert in ice sculpting, piano playing, card flicking, and French, Bill Murray’s character is believed to have spent nearly 34 years repeating the same day.

Welcome to WFH Month Three! Or as I like to say #WTFWFH.

Of course, it is not quite that bad. The commute is fantastic. I get a bit more sleep. I see a lot more of my family. And my suits have all been dry-cleaned. But the monotony of staying at home is beginning to wear on me and feel a bit like my own personal Groundhog Day. With that I have some confessions I need to get off my chest.

First, despite this deceiving photo, I confess that I did not run in a kilt for the @FuturesForKids Virtual 5K Run. It turns out it’s hard to find a kilt when the world is completely shut down. Instead, I took a picture in my wife’s plaid wrap after running my 5K. I just couldn’t muster wearing a wool skirt for 3 miles on a hot Washington Day in front of hundreds of people. Forgive me @TradingJeremy and @JohnLothian.

Second, I must confess that my home office is no longer located in my laundry room, now having set up shop in the quieter spare bedroom in my basement. I do miss the laundry room’s views and the smell of detergent and dryer sheets but there is just too much rinse-n-repeat in the Lukken household to make it practical. I still visit the laundry room for certain calls, so I don’t plan to change the name of this column. Besides “News from the Spare Bedroom” doesn’t quite have the same ring. Click here for more inspiring home office set-ups from several industry leaders and friends of FIA!

My last confession is I‘ve decided to give up putting on a tie after Memorial Day. I have remained steadfast for 10 weeks on wearing a tie daily to the home office (except for casual home Fridays of course), but the summer months and dry-cleaning bills are causing me to reconsider. This opens all sorts of possibilities in my wardrobe, including industry-sponsored clothing. Hint-Hint Pat Kenny.

Okay, I feel better already…

With in-person gatherings still on-hold, FIA has enhanced its virtual content to meet the needs of its members. Our first live-stream video webinar on the impact of negative crude oil prices was tremendously successful with over 800 individuals from 26 countries registered for this presentation. We hope to build on this success by increasing our offerings of virtual programming for our global membership.

FIA is also exploring larger scale, enhanced virtual platforms for upcoming conferences should these events not be able to occur in person. Regardless of the pace in which the economy reopens, FIA will be prepared to deliver valuable content virtually while simultaneously giving sponsors and exhibitors the needed tools to showcase, network and engage. To me, this is an exciting opportunity that unlocks time and location as barriers for more individuals to participate in our events.

During this uncertain time, FIA’s advocacy for its members has remained steadfast. The first phase of this crisis involved the industry managing significant market volatility while working from home, away from the normal systems, personnel, and controls of the office. This was not easy, but our industry showed tremendous resilience in keeping markets functioning and orderly during this time.

During this phase, FIA was a strong voice for keeping markets open and for seeking regulatory accommodations to allow work-from-home to occur. To their credit, market regulators have been extraordinarily helpful in granting limited relief where it was necessary.

The good news is, despite this volatility and strain, our markets have fulfilled their public purpose of discovering prices and allowing businesses to manage risk. The clearing system—an integral benefit of our market infrastructure—successfully mitigated counterparty risk and showed why this industry was the model for post financial crisis reform.

That said, the pandemic exposed areas where improvements can and should be considered. Did margin models work as anticipated by CPMI IOSCO global standards or are further calibrations necessary? Did the volatility and enormous number of trades cause stress on the technology, clearing and back-office systems? Did bank capital provide the systemic buffers as intended or was it a drain on liquidity during a time of market need? These questions must and should be asked. This is an opportune moment for all stakeholders in our industry to consider what lessons we can learn from the pandemic.

This crisis provides a real-life exercise of a stressed market and how the financial crisis reforms worked. But for an honest review, we must put politics and the normal competitive battle lines aside. This is not a blame exercise but a dispassionate analysis to help us see what worked and what didn’t.

Like past crises, FIA stands ready to be an honest broker and help make recommendations on improving our markets. That is what makes this industry great. We come together when it matters. And I must confess, despite it feeling like Groundhog Day, this is a time that matters.

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