Here's a somewhat optimistic report following Britain's vote to leave the European Union:
- "The financial system overhauls introduced in the United States and Europe since the 2008 crisis, and the willingness to provide emergency support to the banks right now, will most likely stop the financial system from imploding."
- - Peter Eavis, What to Watch for in Trading After Shock of ‘Brexit’, NYT, June 24, 2016
Eavis points out that the world financial system has survived several jolts without collapsing:
- The global financial system has in recent years managed to absorb rolling debt crises in Greece, military clashes in Ukraine, down-to-the-wire budget fights in Washington and a shock currency devaluation by China.
And though some say it was a close call, the financial system survived the Great Recession.
As a man advised his daughter during her first year of driving, close calls should be recognized as an indication there's a high probability of an eventual accident. Only when you're driving forward without any close calls, without the odds being better than just "most likely" that there won't be a catastrophic crash; only then can you consider yourself a good driver, with reasonable confidence of avoiding a premature accidental tragic end.
Eavis's conclusion is not entirely reassuring:
- People who have bet on the world ending in recent years have lost a lot of money. But be very open to the notion that Brexit could be the event that finally makes them rich.