TITLE:
Brexit: The Impact of the Fluctuation of Pound Exchange Rate on the Banking Performance and Profitability
AUTHORS:
Jianao Lu, Jiongcheng Lu, Jialu Lv
KEYWORDS:
Brexit, Exchange Rate of Pound, Bank Performance, Profitability
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.11 No.4,
April
30,
2021
ABSTRACT: The study investigated the relationship between exchange rate and bank performance or profitability after Brexit. The study uses three performance measures (including return on equity, return on assets, and the ratio of capital to deposit) as dependent variables and five various measures (government expenditure, GDP, inflation rate, and Dummy—Brexit) independent variables. The investigation is performed using data from two levels: one is for a sample of 34 banks in the United Kingdom from 2009 to 2018, another is for the whole country’s bank performance. The result indicates a correlation between bank performance and exchange rate during the period of Brexit. However, due to the size and availability of the data, the finding remains to be discussed.