The Hotel Europa, you can check in but you can’t check out

If you are not confused enough on the ramifications of Breix, the law of unintended consequences has reared its ugly head. The drop in the value of sterling has sent been attributed to the country’s decision to leave the EU thus creating uncertainty. (I purposely avoided mentioning the flash trading that collapsed sterling late last year that had NOTHING to do with Breix.)

However, the weakened sterling has helped many sectors of the UK economy and made it much more competitive unlike Greece which has priced itself out of the market by staying with the euro.

Its also amusing that France and Germany are pushing back so much against the UK leaving since they fear that other countries would follow. Obviously, they don’t want anyone else to break out of jail.

One last thing about Breix. It may not be that easy for financial institutions to abandon London for greener pastures like Frankfort or Amsterdam. The majority of international contracts are based on English common law and many disputes are litigated there. And, one of the reasons for leaving the EU is the onerous regulations imposed by Brussels.

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