US Banks Warn of Brexit Aftershocks
TEHRAN (Tasnim) – American banks have lined up to issue warnings about the aftershocks of Brexit. Citigroup, which draws more revenue from abroad than any of its domestic peers, cited “significant uncertainties” following the Brexit vote as it complained of a challenging environment.
Bank of America also told investors to brace for several years of market volatility because the vote had introduced “complexities and variables” in estimating the fair value of certain units.
Also chipping in, JPMorgan Chase Chief Executive Officer Jamie Dimon said Tuesday that the breakup of the whole EU was a possible long-term risk following Brexit. Meanwhile, Japan’s 28 trillion yen ($275 billion) new stimulus plan included 1.3 trillion yen to mitigate Brexit risks among small- and medium-sized businesses.
The pension plans of companies in the FTSE 350 Index were dealt a blow by the Brexit decision, according to Citigroup. Lower corporate bond yields and weaker economic growth mean pension liabilities hit a record high of 813 billion pounds, analysts led by Jonathan Stubbs said, Bloomberg reported.
Rebuilding the broken bits of Britain’s economy will be key to how well it prospers outside the European Union.
With the World Economic Forum ranking the country just 27th for quality of infrastructure, there would seem to be much to do.
By delaying a decision on Britain’s first nuclear plant in a generation, British Prime Minister Theresa May has raised doubts over her commitment to such projects.
Other big ticket projects currently left in the air are a high-speed rail line from London to the north of England, an expansion of airport capacity and urban transit improvements, Benjamin Katz and Alex Morales reported Tuesday. All told there could be 405 billion pounds worth of initiatives sitting in the pipeline.
May is seeking to regain the initiative over what she calls a “proper industrial strategy” by holding a meeting of ministers. She said in a statement that “to take advantage of the opportunities presented by Brexit, we need to have our whole economy firing.”
Britain’s departure from the EU may turn out to be the most tortured divorce proceeding in history with high-level summits and hours of backroom horse-trading before the UK fully breaks away.
Ian Wishart and Matthew Campbell take a look at how intense the negotiations will prove to be. Although prime ministers from Margaret Thatcher onward successfully defended opt-outs from the euro and passport-free Schengen zone, about half of British legislation with a significant economic impact derives from the EU, the House of Commons Library said in 2010.
