, Columnist
Brexit Might Have Cost Banks $165 Billion
An NYU model says that's how much more capital they would need in a crisis.
Ouch.
Photographer: Simon Dawson/BloombergThis article is for subscribers only.
For those wondering about the repercussions of Britain's vote to leave the European Union, here's a data point: By one measure, the largest U.S. and European banks are about $165 billion worse off.
A model set up by economists at New York University regularly performs a sort of simplified stress test on the world's largest financial institutions. It does so by asking the stock market what it thinks about the value and riskiness of the banks' assets, then using that information to estimate what would happen to the banks in a severe crisis -- and how much added equity capital they would need to avoid distress.