If you leave the UK without an agreement, the bank will be ready for war on the 21st, and the market will be confused 10 days ahead

[London 9th Reuters]-The turmoil over Britain's withdrawal from the European Union (EU) could come to markets and financial institutions 10 days earlier. Several bunkers say:

The date for Brexit is 31st. According to a law passed by Congress last month, if the British government cannot agree to a withdrawal agreement at the EU summit on the 17th, Prime Minister Johnson is required to request a postponement of withdrawal by 19th. Meanwhile, the new proposal announced by Johnson last week is unlikely to be accepted by the EU, and he clearly states that he will not postpone the withdrawal.

In other words, if Mr. Johnson refused to request a postponement of withdrawal by the 19th, and the withdrawal without agreement became the most realistic scenario, the market and investors will be in such a situation on the 21st, the first business day. Will react.

Five banking officials said an emergency plan is being prepared to deal with the developments that will squeeze stock prices, bond prices and pounds on the 21st.

Traders at each financial institution are prepared to stay in the workplace 24 hours a day. At least the two major banks intend to have the senior management set up a Brexit “control room” to oversee the business, and regulators keep track of market trends in real time.

An international bank executive said, “Everyone recognizes the 21st morning, when the market opens, is an important point in the Brexit flow.”

The EU is the largest export market for the financial services industry in the UK, and if it is withdrawn without an agreement, it will hinder some cross-border operations. In the end, if the postponement of withdrawal was requested, the cabinet resigned, and if it was forced to leave without agreement, it was expected that parliamentary disputes and court battles would be expected, both of which would make investors uneasy.

<The market is still calm>

The pound still remains in the most recent trading range, and the market still expects the probability of an uninformed exit to be less than 50%. The expectation that a general election will be held prior to Brexit is also dominant.

Also, there is no sign of panic in the options market so far, and the expected volatility has settled.

Yet another international bank official explained that a detailed plan to manage some of the volatile market environment from the 21st to the 31st is due.

On the 21st, autumn breaks will begin at many schools in the UK, so banks are urging employees to apply for travel and vacations with due consideration.

“We continue to be prepared for a hard withdrawal scenario, which may mean that the trading department needs more employees than usual.”