“Uncertainty” slows the pace of “expectant” financial markets before the decision of “Brexit”

The “uncertainty” before the British referendum that will decide next Thursday a possible exit of the European Union of the United Kingdom – what is known like “Brexit” – keeps “expectant” to financial markets that are showing “lately” a cautious behavior pending on the outcome of the vote. Francisco Peñaranda, associate professor at the City University of New York, said that investors “prefer to have money in the current account” because “they are risk averse.”

The economist, co-director along with Juan Manuel Rodríguez-Poo, Professor of the University of Cantabria, the monograph “New Techniques for the analysis of financial markets, which has been inaugurated in the framework of University of Cantabria Summer Courses, pointed to the media before the start that if the British decided to leave the EU “they will have to renegotiate their trade agreements with other countries.”

In addition, Peñaranda spoke of “uncertainty” when referring to the votes that will elect in November the next president of the United States. “If Donald Trump wins the election, we do not know what kind of international policy he’s going to take.” A situation he called “bad” for “risky assets” while, on the other hand, it is “good for German treasury bills”.

Rodríguez-Poo pointed out in relation to Brexit that “we do not know the effect that a decision can have in the direction of exit” although if we take care that the markets “act with past, present and, in some cases, with expectations of future behavior, it is suspected that measures may already be taken to protect against certain risks”.

“What is clear,” said the professor, is that it will be a “very long night for operators in the City of London and in all the world’s financial centers.” In this sense, he stated that “precisely” the course that co-opts these days in the University of Cantabria, and whose inauguration also came the director of the Summer Courses, Marina Torres, and puts on the table “theories that can explain what will be the results of the possible departure of the United Kingdom from the European Union”. We study theoretical frameworks in which at a given moment you fit the different problems that can be found in reality. It does not create a theoretical framework “ad hoc” to a specific problem, but with the tools that have and are known are intertwined and solve the problems that are appearing, “he said.

In any case, he said that “London is the main financial center of Europe and it is being in the pound and out of the euro” but warned that the departure of the EU country can “affect not money” but “trade, the traffic of other goods” because to stop being part of the “single space” would mean having to pay “tariffs and customs”.

Finally, Marina Torres stressed during the inauguration of the course “the magnificent cast of experts and professionals” who will share with students “their experience and knowledge” of the new tools for the analysis of the financial markets. In addition of Francisco Peñaranda and Juan Rodríguez-Poo, the other professors are: Sonia Benito Muela (National University of Distance Education (UNED)); Faustino Prieto Mendoza (University of Cantabria); Jose Maria Sarabia (Univesity of Cantabria); Alexandra Soberón (University of Cantabria), and Stefan Sperlich (University of Genevá).