Banks braced for all-night trading following Brexit vote

These offices in the financial district of Canary Wharf in London are expected to be full of activity after the Brexit vote, as major banks plan to have senior staff and traders working or on call even as results start to dribble in after polls close
These offices in the financial district of Canary Wharf in London are expected to be full of activity after the Brexit vote, as major banks plan to have senior staff and traders working or on call even as results start to dribble in after polls close.PHOTO: REUTERS

LONDON • The world's biggest banks will draft in senior traders to work through the night following the United Kingdom's referendum on European Union membership, set to be among the most volatile 24 hours for markets in a quarter of a century.

Citi, Deutsche Bank, JPMorgan, Goldman Sachs, HSBC, Barclays, Royal Bank of Scotland and Lloyds are among those banks planning to have senior staff and traders working or on call in London as results start to dribble in after polls close at 2100 GMT on June 23 (5am Singapore time), sources said.

A vote to leave the European Union would spook investors, placing a question mark over the future of the United Kingdom and its US$2.9 trillion (S$3.9 trillion) economy.

Some banks are planning the night down to the smallest detail to keep their traders on top form - laying on all-night catering and booking nearby hotels to offer temporary respite.

"It is the biggest planned risk event that anyone can remember, so everyone is going to be involved," said one senior foreign exchange trader.

London accounts for 41 per cent of global turnover in the US$5.3 trillion-a-day foreign exchange market, more than double the turnover in the United States and far more than the 3 per cent of its closest EU competitors, France and Switzerland. A vote to leave could unleash turmoil on foreign exchange, equity and bond markets, spoiling bets across asset classes and potentially testing the infrastructure of Western markets such as computer systems, stock exchanges and clearing houses.

Federal Reserve chair Janet Yellen has cautioned that a Brexit vote could potentially push back the timing of the next rise in interest rates in the US, while Bank of England governor Mark Carney has said the sterling could depreciate, "perhaps sharply" .

Despite facing a battle against surges in trading volumes, volatile prices and, at times, not enough buyers or sellers to meet demand, some traders are rubbing their hands at the prospect of a night and day of high drama. "You look forward to days like this," said a bond trader at a London bank. "There's money to be made and lost... You've just got to hope you're on the right side of it."

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 16, 2016, with the headline 'Banks braced for all-night trading following Brexit vote'. Print Edition | Subscribe