K.’s biggest bank, Barclays Plc, said Monday that the country could lose nearly $600bn of its $1.3 trillion in sovereign debt due to a Brexit vote that could lead to the end of the country’s trading relationship with the EU.
The British government said last week it was seeking a new bailout from the European Central Bank, and the European Commission has urged it to extend its emergency measures.
The Bank of Europe said in a statement Monday that “if there is a Brexit, the impact could be catastrophic.”
It cited the possibility of a large loss of money in a currency market that is heavily weighted toward the U, as well as potential economic and political ramifications.
“It is also possible that the financial markets could react negatively to the Brexit, which could result in a sharp drop in the value of the pound and lead to a currency depreciation,” the BER said in the statement.
The Brexit vote, which the U!
voted to exit from the bloc in March, has triggered a currency war in Europe, with Britain and other countries trading in euros against the dollar and other currencies.
Bank of America Merrill Lynch, JP Morgan Chase & Co., Bank of Nova Scotia and Royal Bank of Scotland have all said they will not continue to do business with the British government.