United States (US) regulators are concerned that the frenzy created by Brexit will absorb increasing attention from United Kingdom (UK) and European Union (EU) regulators, so much so that market oversight might suffer. On June 27, 2016, the Commodity Futures Trading Commission (CFTC) convened a meeting of the Market Risk Advisory Committee, during which Chairman Timothy Massad pointed to growing “volatility.” In response, the CFTC has ramped up monitoring and efforts to “work with exchanges and clearinghouses and other regulators and do all [it] can to ensure [that] markets function properly.”
The CFTC is particularly concerned with commodity price fluctuations and risk positions at clearinghouses. Massad said, “The UK authorities and the EU will be spending time figuring out the implications of this vote, and that may limit the time and energy they have for some other things.” One of the key UK officials monitoring this space, Jonathan Hill, the British EU Commission, announced his resignation over the weekend. CFTC Commissioner Sharon Bowen said the UK’s decision could have “long-lasting effects” on regulatory policy in the US, saying the CFTC will “need to make many decisions in light of this new reality.” A stronger US regulatory presence coupled with waning EU oversight could create unusual gaps and overlaps in global market supervision.
£1 GBP = $1.34 USD
€1 EUR = $1.11 USD
(as of 7:00 AM EST, 6/29/2016)
Merkel Says No Chance for UK to Reverse Brexit Decision – German Chancellor Angela Merkel responds to commentators suggesting that the UK could reverse its decision to divorce from the EU. She said, “I want to say very clearly…that I see no way to reverse this.”
US Secretary of State Casts Doubt on Brexit Process – Secretary of State John Kerry met with UK Prime Minister David Cameron, suggesting there may be ways the referendum could be “walked back.”
Scotland Ramps Up Efforts to Block Brexit – Scotland’s First Minister Nicola Sturgeon called Brexit “deeply damaging” and said Scotland was considering legal measures to block the EU departure.
Japan Fears Contagion – The Japanese government has encouraged its central bank to take monetary action to avoid the spread of contagion in the aftermath of the Brexit vote.
UK Real Estate Markets Experience Fall Out – UK-based real estate companies have lost billions as investors flee British property markets and infrastructure development.