US banks put regulators on notice over Brexit

US banks put regulators on notice over Brexit
# 20 June 2016 15:16 (UTC +04:00)

Baku - APA-Economics. US banks have put federal regulators on notice over how they think Britain’s departure from the EU would hit their businesses, in the latest sign large institutions are braced for how such a vote would ripple through the financial system, the Financial Times reported.

Some of the 33 banks taking part in the annual “stress tests” included the risks of a Leave vote for a British exit, or Brexit, in their submissions, according to people with knowledge of the process — even though watchdogs did not require them to.

The Federal Reserve is due to release first round results of its stress tests on Thursday, the day the referendum is held.

Concerns are mounting on Wall Street over the dangers of Brexit. London is a crucial location for several US banks. They use it as a base from which they can access the European single market.

A vote by the UK to quit the EU could knock between 5 per cent and 9 per cent off profits next year at five of the largest US banks, KBW estimated in a report last week.

The analysts cited foreign exchange volatility, uncertainty putting clients off trading and dealmaking, and higher expenses arising from relocation out of London.

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