Capital markets reel as UK shatters EU unity

Europe Map
By Jon Hay, Ross Lancaster, Toby Fildes, Tyler Davies, Virginia Furness
24 Jun 2016

Capital markets have been hit by a cataclysm, the worst political shock since 11 September 2001 — though the immediate effects on financial markets may not be as grave as those of the 2008 financial crisis, because the solvency of banks is not in question.

The UK’s decision to leave the European Union caused huge rises in risk premiums on Friday morning, which are likely to subdue capital raising in European bond and equity markets for months.

But liquidity has held up well in markets, contrary to fears that trading could seize up ...

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