BoE warns of ‘pressing’ need to avoid no-deal Brexit risks

EU 'must support financial services'
EU 'must support financial services'

The Bank of England has warned of the “pressing” need for action to ward off risks to trillions of pounds of financial products from a cliff-edge Brexit.

After its Financial Policy Committee meeting last week, it said “timely action” is needed from the EU to protect against disruption to derivatives, insurance contracts and the transfer of personal data.

Without it, the measures needed to mitigate threats will be “disruptive and costly”, it warned.

The FPC said: “There has been considerable progress in the UK to address these risks, but only limited progress in the EU. In the limited time remaining, it is not possible for companies on their own to mitigate fully the risks of disruption to cross-border financial services.

“The need for authorities to complete mitigating actions is now pressing.”

It marks the latest warning shot from the Bank after it said in June that the EU needed to do more to prevent Brexit causing havoc in markets.

The Bank estimates that £41 trillion of derivatives face legal uncertainty after Brexit on March 29 unless the EU takes action to ensure continuity of existing rules.

The UK is passing legislation through Parliament to allow EU-based providers of insurance policies and centrally cleared derivatives to continue to service their UK customers.

But the EU has yet to take similar action.