 session. Let's get some thoughts coming from Mark Bailey from Fig Securities. Mark, good morning, welcome to the program. Good morning, Dean. Obviously we're talking about Brexit. Can you tell us how credit markets behaved in the wake of this surprise move? Obviously markets were not positioned for Brexit, but give us some insight into what credit markets I guess are telling us about the situation. Yes, Nadine, I mean as you would expect it was a very volatile trading session on Friday and along with the equity markets you did see some weakness in credit indices. The investment grade market in Europe was around about 18 higher at around about 95. Less so impacted were the US which was around about eight wider and our own Australian Aussie Eye Tracks was around about seven or eight wider as well. So the main focus as you would expect was on European credit indices and within that obviously the financial sector, the UK banks had a significantly larger hit to their spreads as wide as you would expect given the implications of the UK leaving the EU. And in terms of the banks it leads to uncertainty in terms of their funding and also in terms of their revenue streams as well. I think with the volatility that we've seen a lot of investors especially on the fixed income side will probably decide to sit on the sidelines and trading revenues which if you believe some of the US banks that had reported were actually improving and that's probably not going to be the case going forward. In addition as well, new issues as well. There's a lot of talk about the new issue market inside Europe and especially inside the UK for not only banks but also corporate issues as well. It's probably effectively closed for two or three weeks whilst everybody figures out what exactly this does mean and I don't think there's going to be any kind of quick resolution as well as you've highlighted on the programme earlier today in terms of the UK camera and resigning. We need to get a new PM in place. The shadow cabinet seems to be in disarray as well so it's going to be a very, very long process even before we start to invoke that article 50 which I think the rest of the countries inside the EU want the UK to do quickly but I don't think the UK has any indication and any compulsion to do that sooner than it wants. I think that's going to be a very elongated process that could take three, four years. Yes, messy, messy, messy. There's no other way to describe it but you mentioned no new issuances, the corporate credit markets in particular I guess being shut down for a couple, three weeks you were anticipating but when that all sort of comes back what do you expect demand to be like because of course everybody's going to be looking for safer havens or going to be looking for returns as well. That's right and I think whenever you get these types of crises, these shocks, the broader investment community and individually as well in terms of everybody's super allocations should be looking and saying look am I prepared to take the risks? Am I allocating it properly in terms of the asset classes that I'm exposed to in terms of the risks that I'm willing to take and also the returns that I'm looking for. Obviously there were some precipitous declines on the Spanish stock market and the Italian stock market's over 12% yet on Friday if you'd have held a 10-year US Treasury bond you would have returned 1.7% on Friday and a 10-year Australian government bond on Friday would have given you a 2% return. Obviously you can pick various asset classes to highlight that but in terms of a broad spectrum, a diversified portfolio investors probably are going to find that safe haven, safety in a lot of fixed income asset classes, government bonds and also corporate credit and as you rightly point out that does diversify away some of the volatility that you will see in the equity portfolio and by and large as we all know Australians are so exposed to the equity side of things compared to the rest of the world that again this is just a good time to reassess their asset allocation decisions. So talk to us particularly about the impact we sort of glossed over a little bit on say wholesale funding markets for Australian banks. Do you anticipate where the pain will really be felt? I think so. I mean I think the main impact will be felt obviously on UK banks and their spreads have traded wider as have European banks but we operate in a global world so all bank credit spreads will have traded higher and wider so that increases the cost of funding in those global market places so if you're a bank whether you're domestic or global you obviously have a choice of different funding avenues and if that is a wholesale market then you'll have to meet the market and that will be by paying higher coupons and higher spreads alternatively you can go into your deposit base and try and attract funding that way by maybe increasing some of the rates that you've seen on term deposits. We haven't obviously seen that yet but that's the decisions that the bank treasurers will have to make and that's if you can get access to the funding I mean I think generally global investors will be happier to allocate, still allocate funds and buy bonds from Australian bonds but I think Australian banks rather than the UK banks where again you've got that considerable uncertainty and those institutions will potentially have to pay up which is why you saw the Bank of England coming out and saying we've got pretty much unlimited liquidity with their 250 billion to support the banking system and provide liquidity to make sure that capital gets to where it needs to go and as we expect probably there will be if the repercussions continue the broader base of global central banks will continue to support their markets as well to ensure this shock is dealt with as smoothly as possible by the financial system. Mark Bailey I hope you don't mind me saying that I detect a note of consternation or perhaps it's nationed in your voice this morning did your job just get a lot more difficult? My voice is actually a bit croaky given the I went to the rugby on Saturday night to watch England win so that's part of the reason I'm but yeah look it's it's it's a huge shock and I don't think you know I speak to my colleagues in the city of London and they certainly did not expect this and you know it's been a lot of talk about you know how you know there's only 36% of the UK population actually wanted a Brexit and whether this is whether the referendum was the correct mechanism to highlight that is up for debate unfortunately we're going to have to live with a decision and it might be even a case that you know that it's not a major shift out of the EU maybe we joined the European economic area so again there's the subtle ways that maybe the UK can continue to be I guess a dominant force in financial services which may not be the case if it does have to completely exit from the from the EU and you've already had your talks and maybe HSBC retreating its head office maybe to Paris and you've had other banks looking at other financial centres around mainland Europe in terms of you know pulling the operations out of the UK and that's going to have huge repercussions for the UK economy London is one of the main drivers for that economy and if you take away that I guess that heartbeat from economic growth it's going to be very difficult for the northern manufacturing areas of what remain of the UK to try and drive that growth going forward and then you've got the additional problem of trying to keep the UK and the Union together you've got Scotland that may look to actually vote to stay inside the European Union and who knows what happens with Ireland and Northern Ireland as well so there's huge issues on the political side of things away from the financial markets which nobody really has any idea how they're going to play out and how they're going to be addressed there's a lot of rhetoric saying that we're in unprecedented times not only in financial markets but politically and I think we're seeing that in terms of the reaction from the from the Labour side of things as well in the UK I mean it's it's hard to acknowledge how momentous and how historical this decision is and it's going to have repercussions not only for the next five years but it's going to be 10-20 years down the line when we're still going to be talking about this and probably still trying to figure out how to put the pieces together absolutely now I know that we've got so much to work through there we sort of pre-Brexit had tossed around the Spanish elections and then we sort of