Regulator cautions banks to prepare for Brexit amid uncertainty

By John O'Donnell FRANKFURT (Reuters) - European banks should prepare themselves and their customers for the risk of an abrupt departure by Britain from the European Union, one of the bloc's top regulators warned on Monday. Flagging its concerns for financial stability as well as the readiness of 'smaller ..

Reuters December 18, 2018 00:05:48 IST
Regulator cautions banks to prepare for Brexit amid uncertainty

Regulator cautions banks to prepare for Brexit amid uncertainty

By John O'Donnell

FRANKFURT (Reuters) - European banks should prepare themselves and their customers for the risk of an abrupt departure by Britain from the European Union, one of the bloc's top regulators warned on Monday.

Flagging its concerns for financial stability as well as the readiness of "smaller ... institutions", the European Banking Authority urged lenders to have "effective contingency planning" and tell customers how Brexit would affect them.

The announcement comes as parliamentary deadlock in Britain has thrust the future of Brexit into doubt, with possible outcomes ranging from a disorderly departure with no deal to another referendum on European Union membership.

"The EBA is ... calling on all financial institutions affected .... to engage with their customers and provide adequate information on the risks and mitigating measures being taken," the regulator said.

Both London and Brussels have stepped up planning for a no-deal exit.

A senior British minister, speaking on condition of anonymity, told Reuters last week that the risk of a "managed" no-deal Brexit was rising, as Prime Minister Theresa May is unlikely to win enough concessions from the EU to satisfy eurosceptic rebels in her Conservative Party.

The minister added that there was no consensus for anyalternative to May's deal, which seeks to keep close tradingties with the bloc after leaving.

In its statement, the EBA said customers worried about the impact of Brexit could contact banks themselves if they had heard nothing from them by the end of the year.

May has repeatedly warned that if her agreement is rejected then the world's fifth largest economy might have to leave without a deal - a nightmare option for many big businesses - or that Brexit might be thwarted altogether.

No deal means there would be no transition period so theexit would be abrupt, but the EU and Britain could try tomake agreements in certain areas, for example on aviation, toreduce the chaos.

Britain is a member of the World Trade Organization sotariffs and other terms governing its trade with the EU would beset under WTO rules.

Business leaders are triggering contingency plans to copewith additional checks on the post-Brexit UK-EU border that theyfear will clog up ports, silt up the arteries of trade anddislocate supply chains in Europe and beyond.

(Reporting by John O'Donnell; editing by Andrew Roche)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.