This analysis is by Bloomberg Intelligence analyst Sarah Jane Mahmud. It appeared first on the Bloomberg Terminal.

Brexit is real risk as U.K.’s bittersweet affair with EU hardens
There’s a real risk that the U.K. will vote to leave the EU in a referendum to be held on June 23. Discontent over the control that Brussels exerts means the status quo isn’t sustainable. Yet, Britain’s exit of the 28-member bloc after 45 years would be drastic, irreversible and may lead companies to relocate. It remains a risk that the government’s renegotiation of the U.K.’s EU membership or the EU’s “better regulation” reform initiative, won’t be enough to sway the public vote.

It’s the final countdown – Is it farewell? Brexit vote looms
The business world has little time to campaign on Brexit after the U.K. government set a referendum date of June 23. The decision followed an agreement by all 28 EU states to a watered down version of demands made by the U.K. at a Feb. 19 summit. While the reform package notes many of the U.K.’s concerns, they don’t offer substantial change and won’t be enshrined in any EU treaty. The government claims they achieved “substantial change” but it’s a poor deal compared with the U.K.’s initial demands.

‘Brexit’ risk brews as U.K. weighs quitting European Union
The view of the U.K. electorate toward remaining in the EU is mixed. A Jan. 22-24 poll indicates 55% of the public would vote to stay in the EU, compared with 58% on Dec. 12-14 (Ipsos MORI). In 2013, 76% of CBI members said the EU single market has had a positive impact on their businesses. If the U.K. were to exit, it would still have to follow EU rules in order to provide financial services in any of the remaining 27 EU nations, yet it would have greater autonomy to tailor rules to the U.K. market.

Cameron’s ‘Brexit’ deal heralds small victory for British banks
The U.K.’s renegotiated membership of the EU may help bolster the position of U.K.-based banks. The EU Council has agreed the U.K. and other EU countries outside the euro zone, including Poland and Sweden, would recieve further protection to ensure their interests aren’t jeopardized by rules being pushed through for the benefit of those in the euro zone. A new red card system would also allow the U.K. to veto EU laws, but the threshold is high — it would need the support of 14 other countries.

Brexit concerns spur EU reform, may drive financial deregulation
The European Commission’s own reform agenda may help sway the U.K. to stay in the EU if it’s quickly executed. Financial-services companies may end up more loosely regulated as a result of the commission’s review into the cumulative effect of all the recent rules, as part of its Capital Markets Union initiative. They could have greater control over future regulatory reform too, because the commission, the EU’s executive arm, plans to overhaul its convoluted legislative process, much of which is veiled in secrecy.

Banks brace for Brexit, EU’s other options look laden with barbs
Financial-services companies based in the U.K. could lose unfettered access to 27 European markets, including Germany and France, if the U.K. votes to leave the EU in June. To continue to do business within the bloc, they would need to continue complying with EU-equivalent regulation and would also have to overcome new practical and legal barriers, such as a proposed financial transaction tax. With no representation at the EU level, the U.K. would have little, if any, influence over what those rules would be.

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