bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 19.01.2017 | Name days: Alnis, Andulis

Nordea: Brexit will not cause a deep recession or financial crisis in EU

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«The European Union will have to control policy following Brexit and make certain that other countries do not follow Britain’s example. There are many who are dissatisfied with processes in the European Union. It is not right, however, that the responsibility is put on the European Central Bank. The European Union can hope for economic growth because the situation has stabilized with good conditions for investments and long-term deposits,» – says Nordea Bank’s head economist in Baltics Žygimantas Mauricas.

The outcome of the referendum in Britain came as a surprise to everyone. In spite of the fact that previous surveys pointed to equal probability of both out comes, bookmakers had expected British citizens to vote in favour of remaining in the EU. On Thursday, when the first results started coming in, it seemed that Britain would remain in the EU, which caused a considerable surge in stock prices on financial markets. Unfortunately, it only served to worsen the market decline after the announcement of the final results, as reported by Nordea.

Because the outcome of the referendum turned out a surprise, the situation on financial markets was especially negative on Friday, 24 June. The biggest fluctuations were noted in the exchange rate for British pound, which had reached its maximum on Thursday only to drop to its lowest level since 1985 shortly after. European shares lost 10% on average. The banking sectors suffered most of all. American and Asian shares suffered as well, but considerably less than the European market. In total, the stock market lost nearly USD 2 trillion on 24 June.

«While analysing the actual effect on global economy and specific markets, we noticed that Friday’s decline was caused by excessive worry, which has little to do with that actual situation. This is why it is likely that we have already experienced the worst this situation has to offer. Everything should settle down by the end of the week. This is confirmed by the fact that Britain’s exit from the European Union will take at least two years. Brexit is not yet confirmed. Weekend discussions showed that there are many different scenarios possible. Signatures are being collected to organize another referendum,» – Nordea experts comment.

However, assuming Britain leaves the EU, this fact is not likely to cause deep recession or a financial crisis. UK will likely experience the biggest impact, because uncertainty will deeply affect investments. In addition, many companies could relocate their businesses from London to European Union. On the other hand, weaker currently will make British goods cheaper, which is good for exports. It could help reduce the negative effect. Brexit could worsen the mood in the rest of Europe. It is not expected to impact economic growth in a major way in the second half of 2016. The effect on the rest of the world will be even smaller. It is worth keeping in mind that the majority of global central banks have already prepared for such a scenario. They are ready to act and provide support, economists say.

«Opposite to what the market’s initial reaction, Brexit is not a catastrophe. Market should recover after weekends. By then investors will have considered the actual effect of Brexit on economy. The current situation could create attractive purchase opportunities for long-term investors. According to data from Ritholtz Wealth Management, history shows that balanced portfolios experience significant growth after large crises. For example, the balance of diversified assets between shares and bonds (60% shares and 40% bonds) had grown 21% after the decline of 1987 and 67% over the course of five years,» – the bank’s exports say.

Ref: 102.109.109.8062


Leave a reply

  1. Walter Burke says:

    Sounds like a smart guy to me.

    Thumb up 0 Thumb down 0

WhatsApp to be provided with bank-contacting functionality

Continuing the digitization process and studying customer habits more intently, it is planned to allow customers resolve matters related to finances using WhatsApp, DNB Bank reports.

U.S. commutes sentence of classified-document-leaker Manning

U.S. President Barack Obama has commuted the sentence of the former U.S. soldier Chelsea Manning, found guilty of stealing and leaking a vast material of classified material to transparency organisations.

Mamikin expects things to get worse in EU after EP elections

MEP Andrey Mamikin predicts the situation in the EU to become worse after elections in the European Parliament and the election of Antonio Tajani as president.

Study results about Latvian schoolchildren urge immediate action

«OECD’s study about the level of knowledge of Latvian schoolchildren urges immediate action. We cannot stop with average results – we have few youngsters, and we cannot afford to give them secondary education,» – said Chairman of Saeima’s European Affairs Committee Lolita Cigane and head of Education, Culture and Science Committee Ilze Vinkele.

Opinions: untrue myths about export in Latvia

Although Latvia is a successful country in Northern Europe, some of the country’s residents believe that all of Latvia’s export depends on Russia and that salvation lies in small wages. Big Event representatives offer their look on what is true.

EHC: Lithuania violated prisoner’s rights with barring internet access

A jail in Lithuania has unjustly barred a prisoner from accessing the internet, according to a ruling by the European Court of Human Rights.

Oil price on a rise in the world; exchange indexes decline in USA and Europe

The price of oil in the world this morning, 18 January, grew in relation to US dollar’s value drop and expectations regarding commercial oil reserves in USA, which compensates on the market the influence from predictions in Russia and USA about oil production increase by the end of 2017.

Association asks to sign proposal on publication of audio recordings from Saeima meetings

In the assessment of deputy quotas the Budget and Finance Committee worked as voting machines. They did not try to assess each proposal’s purpose, states Delna – Society for Openness, urging other to sign a proposal on Manabalss.lv for the publication of audio recordings made during meetings of Saeima committees.

Estonia to raise wages for healthcare workers

Estonian Health Insurance Fund's has allocated a total of 23.6 million euros for raising wages of health care workers, who last year asked for at total of 68 million euros.

Defence cooperation agreement concluded by Estonia and U.S.

Estonia and the U.S. have signed a bilateral agreement on cooperation in the field of defence, which clarifies the legal framework for the presence of American Armed Forces in Estonia.

Influenza epidemic declared in Latvia

On Tuesday, 17 January, Disease Prevention and Control Centre declared the beginning of an influenza epidemic in Latvia.

Vegetable prices in Northern Europe increased by tough weather in south

Due to Italy and Spain having unfavourable weather for growing vegetables, prices of a number of vegetables are likely to increase.

Reirs: Latvia should introduce minimal social fees

In the next year’s budget it will be necessary to plug the EUR 50 million-large hole in the social budget, said Welfare Minister Janis Reirs in an interview to LTV on Tuesday, 17 January.

European Parliament speaker’s election won by Italian Tajani

Italian right-wing politician Antonio Tajani has won the election for the post of the chairman of the European Parliament. The 63-year-old Tajani is a former press representative of convicted former Italian PM Silvio Berlusconi and an ex-European commissioner

In spite of opposition from businessmen, government supports railway electrification project

On Tuesday, 17 January, the Cabinet of Ministers supported Transport Ministry’s and LDz’s proposed project for electrification of the country’s railway network and its further development. The plan provides for the electrification of the railway network from Daugavpils and Rezekne to Riga through Krustpils, as BNN was informed by Transport Ministry.

Study: users still do not make passwords that are sufficiently secure

«Considering the amount of private and confidential information we tend to store on the internet, users should be more careful about security and effective passwords. This seems self-explanatory, but many people, it seems, do not understand how easy it is to make password-management mistakes,» – says Kaspersky Lab consumer commercial manager Andrey Mohola.

SRS uncovers 3,200 litres of illegal diesel fuel in Riga

During an information check regarding possible storage and realization of illegal diesel fuel, State Revenue Service’s Customs Police uncovered illegally stored diesel fuel within a garage territory in Riga on 11 January, 2017.

GFK determines the most popular smart-phones in Latvia

Last year, Latvians were prepared to spend more money on smart-phones than in 2015. According to results of a study by GFK, residents spent EUR 389 on the purchase of a smart-phone on average.

BATL: intention to electrify railway line is either incompetent or is the scam of the century

In spite of the industry’s calls over the past two years, Transport Ministry still has not provided a cargo attraction plan, a unified offer for our cooperation partners. Nor do we have a clearly defined transit strategy and development direction, says Baltic Association – Transport and Logistics.

Poroshenko warns Ukrainians could get disillusioned with Euro-integration

The choice of the people of Ukraine to go the road of deepening ties with the European Union could turn into disappointment if delays with visa regime and association agreement continue, Ukrainian president Petro Poroshenko stated.

Ventspils municipality’s planned budget expenditures are higher than revenue

On 12 January, Ventspils City Council approved the budget for 2017. It is stated in the document that the base budget’s planned revenue is EUR 13,584,298. Budget expenditures are planned at EUR 22,652,396, as reported by Marlena Zvaigzne, editor of Ventspils Novadnieks.

Rating: Estonia best in Baltic in growing and retaining talent

In a rating on the success of countries in growing, attracting and retaining talented workers, Baltic states have all been ranked in the top 33 out of 100 countries.

FM: gradual transfer to electronic procurements is planned

«The procurement field has changed significantly over the past several years. And it is not just because of the new directive announced by the European Parliament and European Council for procurements. One other factor to consider is the aiming for better management, reduction of the administrative burden and more efficient use of public resources,» – reports Finance Ministry’s Legal Department expert Liga Neilande.

Adding more EUR 10m Rail Baltic stops up for analysis, says Ratas

The current project of the international high-speed railway Rail Baltica contains three stops in its Estonian part, while adding more would need careful analysis, stated Estonian Prime Minister Jüri Ratas.

Okmanis: stores should become modern to survive

Competition in the trade sector continues to grow in Latvia, admits Raimonds Okmanis, chairman of Latvian Traders Association.

When do you pay fines for speeding?

View Results

Loading ... Loading ...

Polls Archive



Category feed: Feed: