The Brexit Vote: The Financial Industry’s View on Its Impact
The Brexit vote was a watershed event for Great Britain. Not only will the vote impact the future economic prospects of the entire European region, but the Brexit vote will substantially impact the global capital markets as firms are forced to re-evaluate their European strategies. It may be too early to determine the ultimate outcomes, but one result is certain: uncertainty will rule the day until the British government shapes its exit from the European Economic Union (EEU).
TABB Group surveyed its global capital markets community to collect feedback on the potential impact of the vote, with 322 market participants responding to the survey. Digging into the data provides interesting perspectives on industry views. European and British respondents are the most negative, while the US and Asia are more optimistic, an indication that the rest of the world is expecting to benefit at the expense of the UK and Europe.
The respondent’s vocation also impacts his or her perspective. Respondents working at trading firms were generally more optimistic, as they largely expect volatility to increase and trading volumes to rise as a result. Trading venues and vendors are also expecting a bonanza from increased volumes, while banks and future commissions merchants (FCMs) worry that the transition will layer on new regulatory and compliance headaches.
The following TABB Group analysis examines three key segments of the data set: sell-side firms including broker-dealers, banks and FCMs; buy-side firms including asset managers, hedge funds and proprietary trading firms; and infrastructure providers including technology vendors and exchanges, swap execution facilities (SEFs) and clearinghouses.
- Fixed Income