Brexit Could Be a Lehman Brothers Event for Markets: Harvard Professor

A UK departure from the European Union could trigger a massive panic for financial markets, similar to what took place after the collapse of Lehman Brothers in September 2008.
Author:
Publish date:

A UK departure from the European Union could trigger a massive panic for financial markets, similar to what took place after the collapse of Lehman Brothers in September 2008, according to one expert. 'It could be [a Lehman event],' said Hal Scott, a professor at Harvard Law School and author of 'Connectedness and Contagion: Protecting the Financial System from Panics.' 'I don't think we will see that, but there's not an insignificant possibility that would happen - we need to be worried about that.' Scott said a Brexit could prompt investors to ditch short-term bonds in favor of safer, longer-term Treasuries and cut off liquidity to banks and non-banks, including money market funds and broker dealers.