Fifteen years after the collapse of the US investment bank Lehman Brothers triggered a devastating global financial crisis, the banking system is in trouble again. Central bankers and financial regulators each seem to bear some of the blame for the recent tumult, but there is significant disagreement over how much – and what, if anything, can be done to avoid a deeper crisis.
MUNICH – On June 23, voters in the United Kingdom will decide whether their country will leave the European Union. They alone will cast ballots, but the political and economic impact of a vote to leave (“Brexit”) would be felt across the EU, if not the world.
For Germany, Europe’s largest economy, the consequences of Brexit could be grave. Public opinion in the country is divided on the issue. Some fear that the EU would become less liberal if the UK left. Others, resentful of the UK’s presumption that it should be allowed à la carte EU membership, are eager to see the British go. When it comes to the economic impact of Brexit, however, Germany has much to lose and almost nothing to gain.
To begin with, Brexit would change the way multinational companies make investment decisions. The UK could face an exodus of foreign firms, as companies seek to retain a presence in the EU. But there is no reason to believe they would necessarily move to Germany; many US multinationals, for example, would likely relocate to Ireland.
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