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Money Talks from The Economist

Money talks: Banks brace for Brexit

Money Talks from The Economist

The Economist

News, Business, Economy, Finance & Economics, Business News

4.41.2K Ratings

🗓️ 31 May 2016

⏱️ 16 minutes

🧾️ Download transcript

Summary

Already under pressure to cut costs, banks are reluctant to spend on contingency plans. But leaving the EU could turn their business upside down. Patrick Lane, banking editor, reports. Also, Soumaya Keynes asks: how many workers are at risk of being replaced by machines?

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Transcript

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0:00.0

This is a passenger announcement. You can now book your train on Uber and get 10% back in credits to spend on Uber eats.

0:11.0

So you can order your own fries instead of eating everyone else's.

0:15.0

Trains, now on Uber. T's and C's apply. Check the Uber app.

0:20.0

The Economist.

0:24.0

Hello, I'm Edward McBride, finance editor.

0:27.0

This week on Money Talks, Man v Machine.

0:30.0

Sumer Keynes and I will be discussing the latest study asking how soon robots will take your job.

0:34.8

And then they looked at their answers and applied them to the entire American economy and found that

0:39.6

half of jobs faced a more than 70% chance of being automated over the next two decades.

0:47.0

First though, a vote to leave the European Union could have material economic effects on the exchange rate on demand and on the

0:55.2

economy's supply potential.

0:56.9

That was Mark Carney, Governor of the Bank of England, giving warning earlier this month that

1:00.4

the British economy would suffer if Britain's vote to leave the EU on June 23rd.

1:05.0

So this combination of influences on demand, supply, and the exchange rate could lead to a materially lower path for growth and a notably higher path for inflation.

1:15.0

Mr. Carney of course is speaking about the long-term impact of Brexit,

1:18.0

but even in the short term it's clear that a vote to leave would have a huge impact on Britain's biggest industry, banking.

1:25.0

Already under pressure to cut costs, banks are not spending much on contingency plans and won't

1:29.6

until they have to, but leaving the EU could turn their business upside down.

1:34.7

Patrick Lane, our banking correspondent, is here with me now to discuss what banks are doing to prepare

1:39.0

for the possibility of Brexit.

1:41.1

Patrick, it sounds like they're not doing very much.

1:43.3

Well, they're doing what they can and what's sensible to do.

...

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