EUROPEAN BANKS: With British referendum polls having narrowed, we note European Banks have rallied. Post this rally, we believe a Leave outcome is no longer priced in. In a Leave outcome, investors could start to price in broader economic weakness and banks could underperform. Funding markets could come under pressure, but there are numerous tools for the ECB to support banks and the sector has EUR3.8tn in free collateral, or c.14% of total assets. In a Brexit scenario, investors could look at European banks along the lines of (i) weak/strong capital, (ii) weak/strong economy and (iii) EU/non-EU exposure and favour well capitalised names with a business mix geared outside the Euro area.