LME distressed at severity of Esma stress tests

Watchdog’s simulated price shocks said to be unprecedented in metals markets

London Metal Exchange (LME)
Photo: HM Treasury/Flickr

The London Metal Exchange is understood to have been left frustrated by its failing grade in the European Securities and Markets Authority’s clearing house stress test this week, after the watchdog subjected its default resources to price shocks that were up to three times more severe than the worst one-day falls on record in key base metal markets.

On July 13, Esma released the results of a stress test for Europe’s largest central counterparties, which simulated two scenarios: a large price

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