AMSTERDAM (Reuters) – The European Union’s gas price cap, which launches next month, could trigger abrupt changes in the market and impact financial stability, the bloc’s financial market regulator said in a draft report seen by Reuters.
EU countries agreed in December to a gas price cap that, from next month, would kick in if prices spike. The European Securities and Markets Authority said market participants’ response to the prospect of the price cap kicking in could ultimately impact financial stability.
“While this behaviour would appear rational on an individual basis, it could trigger significant and abrupt changes of the broader market environment, which could impact the orderly functioning of markets, and ultimately financial stability,” ESMA said in a draft report due to be published later on Monday.
(Reporting by Anthony Deutsch; writing by Kate Abnett; editing by Huw Jones)
