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By Geoffrey Smith
March 30, 2016

It would be nice to think that this was a principled stance against one of the myriad ugly neologisms and buzzwords that are the hallmark of bankspeak, but no such luck.

Bank of America is telling its senior staff to avoid using the word “Brexit” as the U.K. prepares to vote on whether to leave the European Union in June, as it tries to avoid being embroiled in the political controversy over the issue.

The Financial Times reported Wednesday that the bank has told its managers “not to provide opinions, not to influence voters, not to assume a particular result and not to engage in campaigning,” fearful of the backlash it may provoke. The paper quoted a bank official as saying that the word Brexit was disparaging and implied a bias against leaving.

As a result, the bank has shelved plans it had to donate 100,000 pounds ($140,000) to the “Stronger In” campaign, in contrast to Goldman Sachs, which has already donated $700,000, and its Wall Street brethren at Morgan Stanley and JPMorgan Chase, which were also reportedly preparing to donate.

No-one at BofA was immediately available to comment early Wednesday.

Foreign banks operating in the City of London are in a particularly sensitive situation with regard to the vote. The status quo, which allows them full access to the E.U.’s single market while escaping some of its more burdensome social legislation, suits them very well, and European protectionist reflexes against ‘Anglo-Saxon capitalism’ could very easily disrupt that arrangement in the bad-tempered haggling over new trade agreements that would almost certainly follow the U.K.’s departure.

Moreover, BofA, with a registered subsidiary in the U.K., would be fully within its rights to spell out its interest in the vote’s outcome as an employer.

However, there is an increasingly clear risk that public backing for the ‘Remain’ campaign could backfire, playing into the hands of those who argue that it is dominated by an out-of-touch political and financial elite.

BofA may have been chastened by the sight of Bank of England Governor Mark Carney (a Canadian and a Goldman alumnus) being accused of anti-Brexit scaremongering by Conservative lawmakers earlier this month. Carney had warned parliament that leaving the E.U. was the biggest domestic risk to the U.K.’s financial stability and that, while the Bank would do “everything in its power” to contain any resulting financial volatility, it couldn’t guarantee that there would be no negative impact on the British economy.

As with the Scottish independence referendum in 2014, debate has become increasingly bitter, with both sides accusing the other of intimidation and of spreading misinformation. The dispute appeared to be a major factor in the explosive resignation two weeks ago of Iain Duncan Smith, a former Conservative party leader who is now campaigning to leave the E.U. along with many other Tory lawmakers, in defiance of their leader, Prime Minister David Cameron.

Most recent opinion polls give the Remain campaign a narrow lead, although the margin of error seen in the Scottish referendum debate and in last year’s general election suggests that a vote to leave is more than possible. The British pound fell to its lowest level in over eight years before Easter as polls showed a rise in support for the Leave campaign.

The traditionally more reliable bookmakers’ odds, however, are much more clearly tilted in favor of the Remain, implicitly putting the probability at over 60%.

 

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