Today (5 July), ifs /The London Institute of Banking & Finance’s Dr Peter Hahn, Henry Grunfeld Professor of Banking, braved a 5.30am start to appear on BBC One’s World Business Report, to discuss the continued economic fallout from Brexit and the Italian banks.
Unexpectedly asked what he would do if he were Chancellor, Peter advised the banks not to panic, carry on and not to get into a spiral of withdrawing credit which could cause a recession:
“The banks will be making their own decisions and assessing where the risks are and the risks are changing which is causing more uncertainty.”
He was also asked how London can hold the title of “financial hub of the World” if the UK is no longer in Europe. Peter advised that there were two things to consider – the future of the banking industry and its access to Europe and the other side, a recessionary Britain and its likely impact:
“We have an environment where we are changing government, changing our laws and we don’t know what those relationships will be. Banks need to take more caution over their lending.”
Moving on to Italy, the discussion turned to the downturn in the Italian banking sector. Pete discussed the “familiar story” of bad loans, which they are being forced to sell off. A key problem here is that a lot of their bondholders are also their depositors.
Peter’s interview can be viewed here at 1.44 and throughout the day on national bulletins.