NEWS
IBS Journal November 2017
13
Catalonian chaos sends ripples through finance industry
I
BS Journal spoke with Boris Batine, CEO and co-founder at ID Finance, about the recent referendum in Catalonia.
“It is not a big problem for us, since we operate across many
countries,” he said. “If one country fails, we still have many that keep us going.”
He added: “Political unrest has followed us pretty much wherever we have been, including Brexit and the UK”. Batine says that there is opportunity in these events, and that they are determined to keep working on their offerings, and even if the worst happened and independence was unilaterally declared, they would just have to set up new offices in Madrid. The nonchalant approach shows the company’s experience in deploying throughout countries around the world and adapting to local environments.
“Barcelona has been a great place to be. It’s one of the major fintech hubs, with plenty of talent, events, and companies we can interact with, but without the prices of cities like London. Hopefully it will stay the same, but either way, we have contingencies that we can rely on easily”.
The chaos in Catalonia is a wake-up call for global investors, warns Nigel Green, founder and CEO of deVere Group.
“The aftermath of geopolitical events of this magnitude have the potential to influence capital markets, which, of course, drive investor returns,” says Green. “Up until now, the chaos in Catalonia had been largely dismissed by global investors as a regional issue. However, now that Mr Puigdemont is effectively
saying that Catalonia will become independent come what may, a considerably heightened game of cat and mouse between Barcelona and Madrid has been started – and this could have far- reaching economic consequences in the short and longer term.
“In the short term, there will be ongoing and increasing uncertainty which is likely to create turbulence in the domestic and regional financial markets. In the longer term, if Catalonia splits, Spain’s economy – Europe’s fourth largest – could lose 20 per cent of its revenue. Plus the process could adversely affect investment into both Spain and Catalonia.
“The Catalonia independence crisis could push Spain’s recent economic progress back. This would inevitably weaken the wider eurozone’s economic stability by pushing the bloc into another era of grinding uncertainty.
“This is perhaps especially concerning as we have recently had the German election, with Merkel returning but with a lower majority, and now we have the Austrian election, and the Italian one next year. And this is all against a backdrop of British PM, Theresa May, being urged to walk away from Brexit negotiations in Brussels if they fail to make progress this month.
“The chaos in Catalonia is a wake-up call for global investors to ensure that they are properly diversified across asset classes, sectors and regions, in order to mitigate the risks of the fall out from this and other key geopolitical events and also – crucially – to take advantage of significant opportunities that they simultaneously present.”
Geopolitical events, such as the unrest in Catalonia, can have far-reaching economic consequences
www.ibsintelligence.com
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