EU banking watchdog warns on Brexit without deal
AFP
Financial firms must speed up contingency plans in the event of Britain exiting the European Union without a deal, the blocs banking watchdog warned on Monday, reports AFP from London.
The European Banking Authority (EBA) said it was imperative that the blocs financial institutions identify potential exposures and risk channels that may be affected, and the possible implications of the potential departure of the UK without a ratified withdrawal agreement in place.
It comes as IMF head Christine Lagarde spoke of the critical importance of continental Europe having necessary regulations in place for the influx of financial firms from the UK.
There is growing concern that Britain could next year leave the EU without a deal, as tough Brexit negotiations stall in regards to the border between Northern Ireland in the UK and Ireland.
EBA chairperson Andrea Enria said that firms cannot take for granted that they continue to operate as at present nor can they rely on as yet unrealised political agreements or public policy interventions.
He added: Risks, capacity and legal implications must be examined and addressed.
Miles Celic, chief executive of financial services lobby group TheCityUK, dismissed suggestions of inadequate preparations.
Financial services firms in the UK have had contingency plans in place for months, he said in a statement.
Our industry has had a constructive, ongoing dialogue with regulators and government. We have worked together to minimise the risk of disruption to clients and the wider economy.
Celic however called upon European authorities to engage urgently and seriously in making sure cross-border financial services contracts, including for individuals pension and insurance products, are maintained following Brexit.
The lack of progress by EU regulators on this vital issue is the most pressing item on the agenda, he insisted.
Based in London, the EBA will move to Paris following Britains withdrawal from the EU scheduled for March next year, while banks and other firms are planning also to move some or all of their operations away from the UK with or without a Brexit deal.
During a visit to Dublin on Monday, Lagarde said that in the near-term, it is critical to ensure that regulatory and supervisory capacities are prepared for the influx of financial firms that will eventually move to continental Europeand Irelandfrom where they are at the moment.
