Mervyn King: Markets Reacting to U.K. Political Turmoil

The video discusses the implications of the Brexit referendum, emphasizing that immediate changes in trade terms will not occur for at least two years. It highlights the political turmoil and uncertainty affecting financial markets. The discussion also covers the future of UK banking, suggesting that while some banks may establish new subsidiaries in the EU, London's status as a financial center is unlikely to change significantly. The video concludes by addressing the political uncertainty due to the lack of a new Prime Minister and its impact on market volatility.

What is the main reason given for not panicking after the Brexit referendum?

• The UK will immediately change its trade terms.

• The referendum results are not legally binding.

• The UK will rejoin the EU soon.

• Trade terms will remain unchanged for at least two years.

What was a significant factor in the Brexit vote according to the transcript?

• A general concern about globalization.

• Britain's role in the European Union and sovereignty.

• The legal system in Britain.

• The future of UK banking.

How might UK banks respond to Brexit according to the transcript?

• By closing all branches in the EU.

• By setting up new subsidiaries in the EU.

• By stopping all euro transactions.

• By moving their headquarters to the EU.

What is said about London's status as a financial center post-Brexit?

• It will only focus on euro transactions.

• It will remain a key financial center due to its legal system and other factors.

• It will become less important than Paris.

• It will lose its status as a financial center.

What is contributing to the volatility in financial markets post-referendum?

• Political uncertainty and lack of leadership.

• Stable political conditions.

• Immediate changes in trade terms.

• A strong opposition party.