Hey you'll never guess what, the UK is about to do something breathtakingly stupid related to Brexit 
In normal language, this means, if there's a no-deal Brexit, UK banks with big EU arms (Barclays, HSBC) will see immediate, large hits to their regulatory capital and liquidity. All the EU govvies and currency they now hold won't count.
Also, let's remember — this is DURING A NO DEAL BREXIT. Do we think UK banks are gonna be rock solid then? Barclays was down 30% the morning of the vote. Gilts & sterling will be crashing, it will be absolute carnage....and the Treasury wants to make it worse.
It's also completely self-inflicted. The EU27 is going to withdraw preferential treatment from UK assets — sure sure, that'll hurt whichever eccentric continentals decide to hold their regulatory liquidity in Gilts rather than Bunds or OATs
But it's not at all a symmetrical situation. It's the equivalent of pointing a gun at your own head as a means of threatening someone else.
Most of the meat is in the above, but I did actually write a story on this. Subscribe to @GlobalCapNews, y'all. It's extremely expensive but you'll probably get a free pen or something if you follow me on twitter globalcapital.com/article/b19mv6…
since this tweet has some traction I should recommend @NLawGlobal whose excellent blog pointed out this whole paper. Um, read it if you like reading about financial regulation? regulationtomorrow.com/eu/draft-capit…
