In the words of... William De Vijlder: The impact of uncertainty - BNP Paribas CIB
 
Thursday 21 July 2016

BNP Paribas Group Chief Economist William De Vijlder discusses the latest market drivers.


Many, not to say most decisions made by households, companies, governments or central bankers are to some degree influenced by uncertainty. Extensive data gathering and rigorous analysis of historical relationships between economic variables can be helpful to reduce this uncertainty, but the reality is that it won't disappear. This applies very much to the environment we are in following the outcome of the British referendum on EU-membership. Uncertainty has increased and is bound to remain high for a long time. There are several reasons for this. Firstly, because of the many questions concerning the negotiations between the UK and the EU: start date, likely length and outcome. Secondly, we already see the economic consequences of the 'leave' campaign's victory. In the UK economy confidence has dropped. As expected, financial markets have reacted strongly and swiftly, leading to considerable declines in some equity markets and in government bond yields, following a jump in risk aversion. High market volatility is a manifestation of uncertainty. Finally, although the comments of and expected actions by central banks are to be welcomed, it will take time before they influence spending and investment decisions. Fortunately, growth in the Eurozone was sufficiently strong so that the direct and indirect effects should only cause a slowdown bringing back growth to its trend rate. Uncertainty has gone up, but growth should continue.  

On Eco TV July, William De Vijlder discusses uncertainty:



William De Vijlder
Group Chief Economist, BNP Paribas Group
William De Vijlder began his career in the Economic Research Department at Belgium’s Generale Bank in 1987 and became Chief Investment Strategist in the Asset Management division in 1989. He was subsequently Managing Director and Global Chief Investment Officer at Fortis Investments. When Fortis Investments merged with BNP Paribas Investment Partners in 2010, he became member of the executive committee of BNP Paribas Investment Partners and CIO Partners and Alternative Investments, and subsequently CIO Strategy and Partners. In September 2013, he was appointed Vice Chairman of BNP Paribas Investment Partners. Since September 2014 he is Group Chief Economist of BNP Paribas.
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