It is “not possible for companies on their own to mitigate fully the risks of disruption to cross-border financial services” in the limited time remaining before the UK exits the EU, the Bank of England’s Financial Policy Committee (FPC) has said.
Calling for an implementation period that would “reduce the risks of disruption” to financial services in both the UK and EU, the committee said considerable progess had been made in the UK but the same could not be said for the EU.
“The need for authorities to complete mitigating actions is now pressing,” according to the FPC statement released after its 3 October committee meeting.
It warned that EU or member state rules will restrict EU households and businesses from continuing to use some financial services provided by UK firms.
“In some cases, particularly in insurance, UK financial companies are restructuring so they can continue to serve their EU customers post-Brexit.
“However, actions by firms alone can be only partially effective.”
The FPC added that “timely action” by EU authorities was needed to mitigate risks to financial stability, “particularly those associated with derivative contracts and the transfer of personal data”.
