Wednesday, 28 March 2018

Bank of England gives European banks extra time to prepare for Brexit

The Bank of England has reassured European banks operating in the UK that they will have more time to prepare for Brexit now that the UK and Europe have agreed a transition period.
It is likely to partially allay fears of a scramble to shift jobs and operations overseas as Britain gets ready to leave the European Union next March.

The move also prompted calls for European regulators to offer similar reassurance to UK banks operating across the Channel.

The Bank's announcement follows an agreement last week on a transition period from next spring until the end of 2020 that will allow companies to have unchanged access to the bloc's markets.

It said that in the light of the agreement it considers that financial firms operating in the UK using "passporting rights" should be able to "plan that they will be able to continue undertaking these activities during the implementation period in much the same way as now".

In letters published by the Bank, it assured European financial firms that they would not need to worry about obtaining any separate UK authorisation or recognition until that period ends.

The Bank also addressed the possibility that the deal may not be formally ratified by governments.

In its statement on Wednesday, it pointed out that the UK Government had provided a "backstop" by committing to legislation if necessary to allow firms to carry on operating as normal on a temporary basis.

It remains to be seen whether European financial regulators will offer the same sort of reassurance to British banks operating in their territories.
The Financial Conduct Authority, in a separate statement, said that UK firms pass porting into Europe "should discuss with their relevant EU regulator the implications of a transitional period for their contingency planning".

It said it continued to work closely with authorities on the continent.

SKY        News.

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