Since Plan A—better known as “there’s not a snowball’s chance in hell that the U.K. will vote to leave the European Union so why think about it?”—isn’t going so well, porcine prognosticators notwithstanding, the powers that be in Brussels (well, Frankfurt, actually) have decided to cobble together a Plan B, and with a whole week to spare.
The European Central Bank would publicly pledge to backstop financial markets in tandem with the Bank of England should Britain vote to leave the European Union, officials with knowledge of the matter told Reuters….
The ECB's pledge would involve opening so-called swap lines with the Bank of England, allowing euros and sterling to be exchanged and effectively making unlimited funding in both currencies available to European banks, the sources said.
Suffice it to say, the markets are not taking the cause of that blank check particularly well.
The Footsie has now shed 378 points since the start of trading on Thursday, when Brexit fears began to mount.
That means a staggering £98bn has been wiped off the value of Britain’s biggest companies in four trading days.
ECB would pledge to backstop markets after a Brexit - sources [Reuters]
Brexit fears wipe £100bn off FTSE 100 in four days [Guardian]
Polls show increasing support for Brexit; Murdoch’s Sun backs ‘Leave’ [Reuters]
Earlier: Markets Should Be Sh*tting Themselves Over Brexit Risk; Americans Aren’t The Only Ones Voting Against Economic Interest; Brexit Good For Spite, Little Else