A Point of View on Brexit

Former PRMIA Chair Dr Colin Lawrence and Scott Vincent yesterday published a paper on their views of Brexit. In the paper, the authors discuss short-term translational risk and provide a trading and regulatory framework for formulating scenarios. 
 
"So, what do we know? Britain has voted for Brexit. The Prime Minister has resigned. Markets are now experiencing extremely high levels of volatility, with sharp falls in Sterling (the lowest level in 30 years), banking stocks (RBS and Barclays shares have been temporarily suspended on Monday), property and housing markets and an expected downgrade in the UK’s credit rating."
 
The authors also discuss the new UK Prime Minister and government, and the timing of involving Article 50 by the new government. The paper concludes with the authors' thoughts on how banks should approach their risk management activities amid uncertainty and the ensuing negotiations to prepare the UK for its exit from the European Union.