⁍ Global banks are preparing for the possibility that there will be no clear victor on the night of the U.S. presidential election.

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⁍ The scenario could spark days or weeks of chaos in global equities and fixed income markets.

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⁍ If the winner is too close to call, a legal battle and even a constitutional crisis could ensue.

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– If the US presidential election is too close to call on Nov. 3, financial markets could see “days or weeks of chaos,” Reuters reports. According to the Wall Street Journal, JPMorgan, Goldman Sachs, and other big banks have been running simulations to see what happens if the race is too close to call. “We’re starting to talk not just to clients, but also to our staff, about the potential that you might see a longer than expected period (with no clear result) because of the large number of mail-in votes,” says Itay Tuchman, a Citigroup global head of FX. “We’re getting prepared for that.” If the race is too close to call, legal battles and a constitutional crisis could ensue. “If there is a constitutional crisis, we believe that the loss of political credibility and standing of the United States as a stable country could threaten its status as a safe haven with unfathomable consequences for the economy and for markets,” says BNP Paribas’ BNPP.PA Head of Macro Strategy Daniel Ahn. One person at a major Wall Street bank says his institution has been running models to stress test market, credit, and liquidity risks in the worst-case scenarios. Market participants need to ensure they have enough funds set aside to take advantage of the volatility. “You have to make sure that you’re not in a position to be a forced seller and you need to make sure that your liquidity is adequate so that you can view volatility as an opportunity and not a problem,” says Matt Freund of Calamos Investments.