UK regulators are being urged to act after it emerged that the US-based online prediction market Polymarket has taken more than $77,000 in bets on whether major British banks HSBC and Lloyds will fail by the end of this year.
Polymarket, which permits users to wager on a wide range of outcomes—from sports results to geopolitical events—had accumulated $77,507 (about £58,530) in positions on the question of the two banks’ survival, raising fresh concerns about the platform’s potential impact on financial-system integrity.
The revelation comes amid mounting unease among observers and industry figures that markets allowing users to back the collapse of institutions could influence perceptions, spread alarm or create perverse incentives, prompting calls for UK authorities to examine whether intervention or regulation is needed.
Polymarket has previously hosted markets on controversial topics, including the timing of major violent events and other sensitive geopolitical scenarios, attracting scrutiny over the ethical and regulatory boundaries of prediction markets.
Campaigners and some financial-sector commentators say the stakes involved in bets on bank failures, even those placed offshore on US platforms, justify closer oversight by UK regulators to protect public confidence in the banking system.
Source: theguardian.com
