Brian Monteith is Director of Communications at Global Britain, which today publishes The Deutsche Bank Liability: How much could the demise of Deutsche Bank damage the UK and EU as a whole? by Bob Lyddon. As the Remain campaign continues to treat the referendum result as if it didn’t happen or was just a consultation, a day hardly passes without us hearing of more reasons to slow down to the point where we won’t have a Brexit at all. Let’s not kid ourselves, such people as the Nick Cleggs and Anna Soubrys don’t want a soft Brexit – after all, they were rejecting the Norway option from the start. They would like nothing more than for us to endure a “dirty” Brexit, a Brexit that becomes so painful, so long-drawn out that the people are finally worn down with it all and capitulate in a crisis of national confidence. That’s why the latest paper from Global Britain on the multi-billion pound cost to the UK if Deutsche Bank fails is timely. It reminds us that there are huge and expensive risks to delaying our exit, and that what we need is to have a quick, clean Brexit that removes those liabilities from the national balance sheet. The Chancellor and his advisors appear to be making a ham-fisted job of reassuring the markets, with talk of resignation threats and leaked Treasury papers putting unhelpful pressure on sterling. A period of purdah from the Chancellor and his entourage would be of more help to the currency than all the unhelpful utterances by him and the garrulous Governor of the Bank of England. Instead of noising off they should read Bob Lyddon’s paper and recognise that they need to know exactly what the liabilities for a Deutsche Bank failure are and just how likely it could be. There is no evidence that this work has yet been done. Everyone appears in the dark. Deutsche Bank is a Global Systemically Important Bank (GSIB) – meaning that if Deutsche goes down, the global financial system goes down with it. Of course it would be rescued before that could happen, but that would surely have a severe impact on the UK if it occurred – for as members of EU institutions we have direct and indirect liabilities. Without a sugar daddy investor, such as the former prime minister of Qatar, Sheikh Hamad Al Thani, Deutsche can only create capital by cutting costs, i.e. contracting, or by reducing lending, i.e. contracting. In the scenario of total and sudden contraction, its main UK creditor, the Bank of England, would sell off the gilts it has bought from Deutsche, putting the proceeds on Deutsche’s BoE Settlement Account, thus enabling it to settle its CHAPS liabilities. Deutsche’s liquidator would likewise sell off the gilts Deutsche was holding as High-Quality Liquid Assets in compliance with global liquidity rules, in order to pay depositors. These would be sizeable operations, which could on their own push gilt prices down, raising UK interest rates and the cost of borrowing for the government – and the rest of us. The impact on the euro would be a multiple of this. Deutsche is a counterparty of European Central Bank monetary operations, and holds EUR liquidity pools in its major banks in the Eurozone, principally in Germany, Italy and Spain. The UK is fully tied in to the European Central Bank, where the ECB could make multi-billion losses on liquidating Deutsche’s positions in TARGET and monetary operations where these have been conducted through Deutsche. We also need to know European Investment Bank’s exposure to Deutsche because the UK is one of the EIB’s largest shareholders, with value-at-risk of nearly EUR40 billion. Any further gearing of the EIB balance sheet would require more subscribed capital or an increase in the capital from the Member States, potentially costing the UK more billions. Three threats from a Deutsche collapse and subsequent rescue – but is anybody at the Treasury prearing for this? Is anyone in the Government aware that delaying our Brexit risks these type of costly complications? We should be glad we are leaving the EU. Deutsche Bank’s problems are symptoms of the EU and Eurozone’s malaise caused by over-regulation and political conceit. We need a quick, clean Brexit to leave all this baggage behind us, so we can focus on the growing markets of the real world.