UNITED KINGDOM (OBSERVATORY) – The European Union regulatory bodies called on banks, investors and customers to take “timely measures” to avoid Brexit’s impact on derivative financial instruments and insurance contracts.
Britain leaves the EU in March 2019, and the agreement on the transitional period until the end of 2020, which the parties agreed last month, will not officially be ratified until October or later.
“Contingency planning should take into account timely responses to all potential problems such as contract continuity and possible displacements,” the joint report of the banking, insurance and market regulators of the EU on the risks to the financial system says.
In the short term, Brexit can affect the access of households and EU companies to financial services provided in the UK, and can affect the confidence of markets.
British regulators said the transit deal meant that EU banks with branches in London should not be rushing to apply for new UK licenses by March next year.
The Bank of England, in turn, wants EU regulators to reciprocate with British clients with clients in the EU to avoid large-scale crossings that would harm London as a financial center.