FX CURRENCY WATCH BRITISH POUND OUTLOOK


On December 9th, David Cameron vetoed a change to the Lisbon treaty to protect London’s financial sector. A surprise that no one expected.


For the past 12 months, the financial markets have revolved around the issues taking place within the eurozone. With officials scrambling to restore investor confidence back into peripheral debt markets and reduce the cost of borrowing for some of the member states, one member has finally come to realize the dangers of belonging to such a union. On December 9th, 2011, David Cameron, the current Prime Minister of the United Kingdom


22 FX TRADER MAGAZINE January - March 2012 vetoed a change to the Lisbon


treaty. This action was taken because the PM was looking to protect London’s financial sector, asking for concessions that would exclude the City of London from excessive EU regulations. This was a surprise


that no one expected,


which raised a lot of new questions about the legal framework surrounding the Lisbon treaty and the functioning of EU institutions such as the European Commission,


Council of the European Union, and the European Central Bank.


Without knowing if Prime Minister Cameron’s decision was political in nature or if the decision may be negotiable in the weeks ahead, the market is already discussing the isolationism that may occur if the rest of the union adopts the tougher


regulations through


a separate treaty that will exclude Great Britain.


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