Costas Milas's picture
Affiliation: 
University of Liverpool
Credentials: 
Professor of Economics

Voting history

Brexit: the potential of a financial catastrophe and long-term consequences for the UK financial sector

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Question 3: What do you think will be the overall economic consequences of Brexit for the UK?

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Answer:
Significantly negative
Confidence level:
Confident
Comment:
Yes, please see my answer to Question 2 above.

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Question 2: What is the probability that the UK experiences such a significant disruption to financial markets and asset prices following a vote for Brexit on 23 June?

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Answer:
31-70%
Confidence level:
Confident
Comment:
The day after a Brexit vote, David Cameron will have to step down at once. Indeed, Eurosceptic Tories would not ‘digest’ the paradox of Mr Cameron negotiating, in a credible manner, BREXIT when he has ‘passionately’ argued in favour of Remain. Whether transition to a new leadership proves smooth or turbulent remains to be seen. Bearing though in mind that Tory Eurosceptics have made substantial noise during the Brexit campaign, it is more likely than not that we will witness political instability. On the economics/financial front, credit rating agencies will respond by cutting our credit rating score. This will hardly be surprising as academic studies have shown that EU membership enjoys a ‘premium’ of as many as two notches. With voters ‘kissing goodbye’ to EU membership, this 'premium' will not hold any more. All of the above will (a) put upward pressure on our borrowing costs (and of course mortgage rates) even if the BoE decides (in a rather desperate move) to cut the policy rate down to zero and (b) trigger financial volatility which, together with rising political instability at the Tories headquarters, will take time to sort out…It is sad really: David Cameron warned voters against a Do-It-Yourself recessionary damage when, in fact, it will be a David It's You damage...

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Question 1: Do you agree that there would be substantial negative long-term consequences for the UK financial sector if the UK were to leave the EU?

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Answer:
Agree
Confidence level:
Confident
Comment:
Have you got permission from the "Leavers" before asking these types of questions? They will say that CFM is EU funded.

The future role of (un)conventional unconventional monetary policy

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Question 2:  Do you agree that central banks should operationalise the use of these alternative tools of unconventional monetary policy for use either in the near term, or in the future, as economic conditions warrant?

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Answer:
Disagree
Confidence level:
Confident

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Question 1: Do you agree that central banks should continue to use the unconventional tools of monetary policy deployed in response to the global financial crisis as part of monetary policy under normal economic conditions?

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Answer:
Disagree
Confidence level:
Confident

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