Brexit for Risk Management Techniques

Question: Discuss about the Brexit for Risk Management Techniques. Answer: It has been found that, European Union is the largest trade partner of United Kingdom. Half of the trades of UK are along with the EU. The operating cost is reduced between the EU and UK due to the membership of EU. For the consumers in UK, the service is very good and cheaper as well. Though, different risks are needed to be considered behind the success of leaving the European Union. Explanation of the risk management concern in Brexit Conundrum In the European Union, United Kingdom is referred to as the largest recipient of Foreign Direct investment (FDI). In UK, the fall of GDP is around $26 billion to $56 billion. Though the non-EU, countries smaller gain and income is identified (Dhingra, Ottaviano and Sampson 2015). In order to attract FDI, a risk is attempt by the UK. In EU uncertainty is very risky though, political contagion is the biggest risk of leaving the EU. The major source of FDI of the British Community is belonging from EU. Analysis implied that, damage in investment is caused due to Brexit. If the UK leaves EU, then the successful creation of FDI projects will produce risk and opportunities both for other European Union based countries. As the cost and benefit management is not evenly distributed thus, immigration is determined to be a major political issue (Bianchetti et al. 2016). Due to the hostile coverage of media, thus the perception of Brexit has become completely disconnected from the reality. In London, the risks associated to Brexit is financially very costly and damaging the competitiveness. Change management in labour supply also affects the balanced situation. Due to the enhancing hostility restriction to immigration in different states, the rest of the EU is facing major risks (Pisani-Ferry et al. 2016). The risks of UK are highlighted by the Swiss experiences. The current financial structure demonstrates that, in much product area London is an international centre for different dominant position. The trade policy maintained is another major risk associated to Brexit. When the British decided that they are going to leave the EU, they faced many issues (Bouoiyour and Selmi 2016). In addition to this, th e strength in number is also reducing while they were setting dispute with the countries. The joint defense procurement plan was in risk. Brexit might have a broad political implication where an argumentative situation rose; this is another major risk to the rest of the countries of EU (Dhingra, Ottaviano and Sampson 2015). The membership of UK added up to 2.26% to the GDP of UK via the foreign direct investment channels. Causes to the companys failure The outcome of Brexit is a vote which is completely against the world. The community was busy to manage the complex issues to the refugee crisis. The current voters are not aware of the actual reason behind the European unification. The main reason behind the failure is that they failed to protect the financial disaster crisis during migration. The increasing Muslim population was another reason behind the failure of European Union. First of all, the bank of England was found to be in major financial rather economical risks. Brexit faced high recession in Britain that possibly affects the entire world. On the other hand, sensible political campaign is another reason behind the failure of EU. Moreover, inefficient political development is another reason behind the failure. References Bianchetti, M., Galli, D.E., Ricci, C., Salvatori, A. and Scaringi, M., 2016. Brexit or Bremain? Evidence from bubble analysis. Bouoiyour, J. and Selmi, R., 2016. Are UK industries resilient in dealing with uncertainty? The case of Brexit. Dhingra, S., Ottaviano, G. and Sampson, T., 2015. Should we stay or should we go? The economic consequences of leaving the EU.CEP Election Analysis Paper, (22). Pisani-Ferry, J., Rttgen, N., Sapir, A., Tucker, P. and Wolff, G.B., 2016. Europe after Brexit: A proposal for a continental partnership.Bruegel External Publication, Brussels.