" varian Wed 27-Jun-18 19:47:39
Britain’s chief financial watchdog has warned that contracts worth trillions of pounds between UK and European Union banks remain at risk of collapse following Brexit, after Brussels’ failure to implement protective legislation.
In a warning to EU officials that time is running out before next March to devise rules for EU banks, the Bank of England’s financial policy committee (FPC) said £29tn worth of contracts could be declared void.
Derivatives contracts, which provide banks and corporations with protection from interest rate rises, could come to an end without fresh legislation from the UK and EU, the committee said in its latest quarterly health check on Britain’s financial services industry".
Try this version varian:
Ian King
Business presenter
"There are two ways to look at the warning from the European Banking Authority that some financial institutions are unprepared for a hard Brexit and need to be.
One is that this is a straightforward, common-sense piece of advice.
The possibility of a hard Brexit is certainly increasing as the Irish border issue, in particular, looms ever larger as a stumbling block. Supporters will argue that the EBA, which seeks to promote financial stability across the EU, is merely pointing that out and reminding the sector that even a transition deal is by no means guaranteed.
The other is that this is a cynical intervention calculated at undermining the City and Canary Wharf and at persuading banks and other financial services institutions to move more of their staff away from the UK to Paris, Frankfurt, Dublin and other locations.
:: Banks not prepared for no-deal Brexit
The EBA will say that, in reminding banks that they must have sufficient numbers of staff at their new operations to ensure continuity of operations after Britain leaves the EU in March next year, it is merely repeating the warnings of others.
For instance, this warning comes just days after Joachim Wuermeling, a member of the board of the Bundesbank, Germany's influential central bank, urged German banks to better prepare for a hard Brexit.
Yet the EBA's advice does rather read and feel like an effort to chivvy banks into moving more staff out of Britain and particularly because it contradicts what the Bank of England has been saying recently.
The Bank, which was not commenting on the EBA statement on Monday, made clear at the end of March that "it would be difficult", ahead of Brexit, "for all financial institutions to have completed all of the necessary steps required to mitigate the risks to the provision of financial services in the EU and the UK".
The Bank of England has told financial services firms there is no need to panic on the prospect of a hard Brexit
To that end Sam Woods, the Bank's deputy governor for prudential regulation and chief executive of the Bank's Prudential Regulation Authority, wrote to banks and other financial institutions, making this observation: "The Government has committed to bring forward legislation, if necessary, to create a temporary permissions regime to allow relevant firms to continue their activities in the UK for a limited period after withdrawal. In the unlikely event that the Withdrawal Agreement is not ratified, this provides confidence that a back-stop will be available."
That was a pretty clear signal to the financial services sector that, while it was important for them to prepare for Brexit, they need not panic about the prospect of Britain leaving the EU without a transition deal.
The EBA's statement on Monday looks like an attempt to undermine the Bank's previous advice and one has to wonder why.
Perhaps it is because it is some City institutions increasingly suspect the EU's own financial regulators are stalling on negotiations.
As Miles Celic, chief executive of The CityUK, the main industry body, said: "Financial services firms in the UK have had contingency plans in place for months.
"Our industry has had a constructive, ongoing dialogue with regulators and government. We have worked together to minimise the risk of disruption to clients and the wider economy.
"The single most helpful thing European authorities can now do right now is to engage urgently and seriously with the issue of contract continuity. The lack of progress by EU regulators on this vital issue is the most pressing item on the agenda."
If this has not been a deliberate attempt by the EBA to undermine the City, it is perhaps just a remarkable coincidence that Monday also saw a separate warning from the European Central Bank to banks looking to set up hubs in the eurozone that, if they did not have their licence applications in by the end of the month, it could not guarantee they would have their authorisations in place by the time of Brexit".
news.sky.com/story/european-banking-authoritys-brexit-warning-is-nothing-of-the-sort-11416615
Highly fallacious stuff coming out of an unprepared EU Banking system. The UK Banking system is ready for Brexit.
I said I would not post on this thread again, but I just can't let misleading story's like this go unchallenged. Guardian or no Guardian.
Don't bother posting back to me on here Varian, I won't be responding on Brexit 2.
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