Brexit and its impact on EU financial markets

Izzeldin, Marwan (2025) Brexit and its impact on EU financial markets. International Journal of Finance and Economics. ISSN 1076-9307 (In Press)

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Abstract

We investigate the impact of Brexit on volatility spillovers across the EU countries. We introduce a Brexit intensity measure that assigns an intensity score reflective of the financial markets’ reaction to the events that occurred as Brexit negotiations began to unfold. We find that Brexit related events have contributed towards increased volatility transmission within the EU. Country-wise investigations show that throughout the Brexit timespan, France is the key volatility transmitter within the Union. By contrast, the UK is evidenced as a volatility transmitter during the early stages of Brexit negotiations, under Theresa May as the prime minister. Out of the smallest stock markets of the block, Ireland, Portugal, and Spain have been amongst those particularly affected.