Belfast Telegraph

UK Website Of The Year

Big banks bringing in overnight staff to deal with referendum result

Published 19/06/2016

Banking staff have been drafted in to work overnight to deal with the result of the referendum on the UK's membership of the EU
Banking staff have been drafted in to work overnight to deal with the result of the referendum on the UK's membership of the EU

Britain's biggest banks are drafting in staff to work through the night on Thursday as they gear up for the EU referendum result, amid fears a Brexit could send shockwaves through financial markets.

Barclays, Lloyds Banking Group and US giants such as JP Morgan Chase and Citi are among those calling in senior traders and workers for what is set to be a turbulent 24 hours after voting closes at 10pm.

Volatility in the pound has already surged to levels not seen since the financial crisis and sterling is set for a rocky ride as the results come in.

Barclays is understood to be planning to fully staff its client-focused teams, such as foreign exchange and commodities trading, so they can help clients manage their risks.

Part-nationalised Royal Bank of Scotland is also manning trading desks 24 hours thanks to teams in London, Singapore and Stamford in the US.

Despite its heavy focus on retail banking, fellow high street lender Lloyds will have some staff in its commercial banking business overnight to deal with client inquiries.

A number of banks are said to be booking nearby hotel rooms and laying on food overnight for trading teams and some firms are even believed to be offering small bonuses to staff drafted in.

The Bank of England has remained tight-lipped about its preparations for the night, saying only that it is carrying out detailed contingency planning, which will be made public after the event.

Other groups are also planning to follow the results of the referendum live, with City of London Corporation chairman Mark Boleat saying it will have "an all night session" on June 23.

The Bank of England has issued stark warnings that a vote to leave the EU could spark turmoil in foreign exchange, equity and bond markets, not just in the UK but worldwide.

In minutes of this month's interest rate decision, the Bank's policymakers said it was "increasingly probable" that sterling could plummet sharply in the event of a Brexit, while a vote to leave was the "largest immediate risk" to global financial markets.

Some banks have predicted a Brexit would see the pound fall to parity with the euro for the first time in history and as low as 1.20 US dollars.

Either way, the outcome of the vote will be significantly market-moving.

The Bank stands ready to pump liquidity into the banking system if needed to avoid wholesale lending markets freezing up as they did in the credit crunch.

Emergency action on this scale was seen during the financial crisis, when banks borrowed as much as £180 billion at any one time from the Bank of England.

Some economists believe the Bank may also move swiftly to cut interest rates to a new historic low of 0.25% if Britons opt to leave the EU.

Jasper Lawler, market analyst at spread betting and financial trading site CMC Markets, said dozens of colleagues will be working overnight after the poll.

But he said fears of market mayhem might be overdone.

"The overriding sense is that things will be all right - nothing really crazy is going to happen," he said.

"Either way, just knowing the results is going to calm nerves," he added.

Read More

From Belfast Telegraph