The Bank of England governor has told banks to bolster their preparations for a no-deal Brexit.
Andrew Bailey held a conference call on Tuesday with Britain’s biggest lenders in which he emphasised that they needed to step up their plans for Britain failing to secure a post-Brexit trade deal with the EU before a deadline at the end of 2020, Sky News reported.
The central bank said on Wednesday: “It is fundamental to the Bank of England’s remit that it prepares the UK financial system for all risks that it might face. In performing that role, the governor meets the leadership of UK banks on a very regular basis.
“As we have said previously, the possibility that negotiations between the UK and EU over a future trading relationship might not conclude in a deal is one of a number of outcomes that UK banks need to prepare for over the coming months.”
Britain left the EU in January and a transition period ends on 31 December. After that, without a preferential deal, British banks, insurers and asset managers will be limited to the kind of access given by the bloc to the US, Japan and Singapore.
Britain’s financial services minister, John Glen, said the country’s financial services industry was “world class” and was ready for whatever Brexit outcome.
“I continue to believe we are still well placed as a sector, whatever the specific outcomes are of negotiations ahead of us in the second half of this year,” he said on a webinar.
A senior EU official said last week that Britain’s financial services sector should be ready for a no-deal Brexit.
Britain wants binding commitments from the EU on financial market access to avoid the country’s finance industry suddenly being cut off from the bloc – a request Brussels had rejected, EU officials and diplomats said on Tuesday.