Broadcasting live to New York, Bloomberg even to Washington, d C, Bloomberg to Boston, Bloomberg twelve under to San Francisco, Bloomberg to the countries is at JAM General one, and around the globe the Bloomberg Radio plus dav and Bloomberg got gone. This is taking stock the battle for Britain's future. Our next guest says that departs are of the United Kingdom from the European Union could trigger a panic for financial markets.
We've got details. That's all coming up. Hal Scott's he's a Harvard law professor, an expert on international finance and securities regulation. We must hear what he has to say because the leave vote once again is looking stronger in the latest polls from the UK. Let's get back to Charlie Pellett. Now he's in the newsroom of the polemic
Business Flash and I think you very much, Kathleen. We are brought to you by the American Arbitration Association International Trade to our business dispute Resolve Faster with the International Center for Dispute Resolution, the leader in alternative dispute resolution around the world. I see d R dot org. Now the developing story Platinum Partners offices being rated by federal agents looking into the hedge funds operations after a manager at the firm was charged this month with bribing a
union chief. This according to a person familiar with the matter. Agents from the FBI and the US Postal Inspection Service were at Platinum's offices in Midtown Manhattan this morning. According to the person who says the rate is separate from the bribery probe, stocks are fluctuating light volume amid fragile sentiment as Trader's way. The probability of the UK voting to remain in the European Union a day ahead of the referendum, an early climb for equities lost momentum after
Brexit polls released today quelled optimism. John Writing is chief economist at r d Q Economics. Well Shirley Brexit vote is not about economic policies, much more about immigration and uh something that there's been Uh there is, I suppose in the English British psychea a deep seated distrust of
of Europe. Fed X falling the most in five months after disappointing investors by not providing more specifics on how the four point eight billion dollar acquisition of Dutch shipping company t n T Express will affect earnings fed X down four point one percent, as MP lore by two to two thousand and eighty six or dropped there a point one percent, Gold down five twenty ounce to twelve sixty seven to drop also of point four percent and three thirty two on Wall Street. Now we'll look at
other news from around the world. Charlie, Thank you from the Bloomberg news room. I Mark Crumpton. This news update is brought to you by the Jeep Grand Cherokee, the most awarded suv ever. The Grand Cherokee continues to raise the bar with its luxurious interior and legendary four by for capability Drive one at our local jeep dealer. Today, campaigners pressed their eleventh hour appeals a day before the UK's landmark vote on membership in the European Union. The
latest Opinion polls showed rival camps neck and Neck. An online survey published by Opinion showed what the company called a statistical dead heat, with forty percent of respondents for leave and for remain. More than a week after the mass shooting in Orlando, Florida, Governor Rick Scott is calling for more support of local businesses near the Pulse nightclub
that have lost revenue. We gotta get her, get these businesses back to work so they can continue to employ the business of the people that that that they employ every day. House Speaker Paul Ryan joined fellow Republicans to unveil more of the House GOP's agenda. Speaker Ryan says replacing Obamacare is an area where they have been working on for some time. There are some longstanding principles you
will see advanced. But what you're seeing today is the consensus by House Republicans on the best way to replace Obamacare, and that is a very important achievement in and of itself. Also on Capitol Hill, rebellious House Democrats shut down the chambers legislative work today, staging a sid in on the House floor and refusing to leave until they secured a vote on gun control. Global News twenty four hours a day, powered by more than journalists and analysts and more than
one d twenty countries From the Bloomberg News Room. I'm Mark Crumpton, Charlie, and we thank you again. Recapping equities lower twenty six minutes ago ahead of the close the SMP five hundred index down two points to two thousand and eighty six, a drop of one tenth of one percent. I'm Charlie Palaton. That's a Bloomberg Business flash the Brexit vote on Bloomberg Radio Brexit. If the UK does decide, does vote to leave the European Union, what will it
mean for financial markets? Our next guest says it could trigger a panic similar what took place after the collapse of leban Brothers. Let's get right to how Scott, now professor at the Harvard Law School and someone who has written and been quoted and listened to UH in great, great depth on the US financial crisis. So we're very eager to hear what he has to say about what could be triggered by europe. How welcome back to the show.
Very much so, UH, an expert on capital markets regulation, author of a new book that's coming out Connectingness and Contagion. What is the contagion that could go from this vote to the markets? Well, let me start by saying, I think the probability of having women repead or compasion or very very low. UH. Nonetheless, if it does occur to all have a very high impact. So we need to worry about it. It's just um. A contagion is basically something that there's an irrational panic of the steer of
the unknown. I mean what happened with women as there was a shock to the system. No large finance institution can fail. Look at what we do with there. That's not going to happen. And it did happen, and that sent people rushing to the exits short term funding withdrawing from banks and importantly non banks when money market funds, etcetera. Uh, no short term funding available in the market. That was the heart of the financial crisis in two thousand and eight.
So you never know when something like this can happen. And if there were a pullout, um, it could. It could be a shock and people said, I don't know what's going to happen next. Uh, I'm going to get my money out of banks or non banks. Hopefully that
never happens, but it has in the past. Professor Scott, I'm wondering if you could draw on your experience in capital markets regulation and speak perhaps about, well, what happens on Friday, if indeed the United Kingdom votes to stay in the European Union, will we see a different kind of capital market structure in Europe. I don't think so. Um, you know, our Europe has been working at um improving their internal market. Uh, they have a big program to
do that. But you know, the fact of the matter is that what integrates the financial markets in Europe is London. London is the key to Europe's financial markets. So that's gonna continue to be I mean, I think that's what people are worried about. If London gets out, where will the center of financial markets in Europe? Well, how this is you touch on a point that is not about panic and it's not about Brexit in crisis. It's also about the EU and certainly the euro Area. I guess
that's what I'm referring to. That the ability to integrate the banks in terms of bailing out grease or you know, across the the area has been limited. Uh. Is there any argument that you can see from a financial standpoint at all for the UK to leave? Is there any benefit they would get from, you know, being outside the EU parameters but still maybe somehow able to remain the center of finance in Europe. Well, as you know, they're not part of the euro so they don't need to
get out of the EU. That of the Euro, they have their own currency, uh, and they've been able to operate as the center of financial markets in the EU even with their own currency. So that give you, uh, you know, some um insight into how important UK financial markets are. UM. So I think that you know, if they what they're what they're concerned about is the level of European regulation and um it's very high. It's very bureaucratic,
um and they have to deal with it. So a big argument for weave is we get rid of these pointy head you know, guys on the continent that are interfering on our free markets in the UK. I think it's totally ex aderated by the way. I think both sides are totally ex entering their consequences of a vote here because they want to win the vote. But I think there is you know, something to be said that the UK, by getting out of the EU would be
free of some forms of financial regulation. But on the other side, trade wise, um, I think uh, politically wise good beople very bad for him, Tolly. Professor Scott, I'm gonna try to draw you on on an unrelated topic that has to do with negative interest rates. In Europe. Have you ever experienced negative interest rates? And what do
you make of them? I've never experienced Sometimes god um uh you know, um it's one thing for um, the stead or potettos and actually doing I would say the Bank of Japan to say to a bank, you know, if you want to park money here, um, you may have to pay us to kick um. You know, it's just between the Bank of Japan and h Bank. Where it gets a little dicey is when that bank who's now paying the Bank of Japan to keep their money there sort of you're still with me here, Well, we
go ahead and give you two seconds. Okay, it gets icy if they tell me that I have to pay a bank to keep my money with them, I'm gonna take it out of that back. Thank you very much. How Scott professor of Harvard Law School, joining us from Boston. This is Bloomberg Radio. The Big Vote on breakfast, will the UK vote to leave the European Union and what our stock markets braced for? And once we get past the vote, what should you be focused on? That's coming up now on Bloomberg Radio.