THEY hoped—and believed—it wouldn’t happen. But now the world’s biggest banks must brace themselves for Britain’s departure from the European Union. Today bankers will simply be trying to weather the turmoil after yesterday’s vote. But in the weeks and months to come they will have to decide whether Brexit means shifting business and jobs away from Europe’s financial capital.

This morning’s numbers are frightening. Banks’ share prices have been hammered, and those of British lenders hit especially hard; the falls are all the harder for the pre-vote optimism that had borne the stockmarket up. Fear that Brexit might mean recession, plus sheer uncertainty, sent shares in Barclays and Lloyds down by almost 30% when the market opened. European banks were not spared: Deutsche Bank shed 21%, Credit Suisse and UBS 13% each. Shares in American banks with bases in London fell at the start of New York trading.

For all that, banks’ stability should not be in question. They have known for months that the vote was coming. Preparing for a Leave win, said a banker last month, was “no different from the daily analysis we do on our...Continue reading