Regulator sets out Brexit risks

Foreign banks insurers and other finance firms could overwhelm the Bank of England's resources if they all apply for licences around Brexit

He explained that restructuring firms to mitigate risks will generally increase complexity, for example with firms that are based in the United Kingdom but want to sell to clients in the EU.

Sam Woods made the comments in a letter to the UK's Treasury Select Committee chair, Nicky Morgan MP, who had asked Woods for an update on the preparedness of the United Kingdom financial sector for Brexit and how firms would cope with a scenario where the United Kingdom leaves the European Union with no withdrawal agreement or trade deal.

The Bank of England has previously highlighted other issues, noting that fragmentation of the European Union financial services market could push up costs and risks for finance firms and their customers.

It also warned of the risk to the United Kingdom economy from potential disruption to trade and the need for banks to be braced for higher bad debt charges if loans turned sour owing to Brexit-related economic turbulence.

The boss of its Prudential Regulatory Authority (PRA), the arm of the Bank responsible for regulating banks and insurers, claims that any added complexity will place a "material extra burden" on its supervisory arm.

"I have also asked Mr Woods for his views on the desirability and design of a transitional arrangement with the EU, to provide more time to negotiate and prepare for a new UK-EU economic relationship".


Woods wrote that financial services are in danger of becoming dislocated and fragmented after Brexit.

PRA boss Sam Woods revealed the Bank's latest assessment after more than 400 financial services firms responded to its request for details on their contingency planning.

The Bank of England has warned it could struggle with the burden of regulating London's financial sector after the United Kingdom leaves the European Union.

This would create more complex corporations with "strongly inter-connected entities between the United Kingdom and EU" that could make the industry more hard to oversee, he claimed.

Mr Woods said that the PRA has received 401 responses from United Kingdom and European companies which operate in the United Kingdom and elsewhere in the EU, with "a handful of very small insurers" yet to reply.

He also warned that the regulator could suffer a significant "material extra burden" by having to regulate more firms when Brexit is undertaken and noted that this and several other concerns posed "a material risk to our objectives, and this work is therefore a top priority". It has warned it may need to ask for more if the biggest risks around Brexit crystallise.

Related:

Comments

Latest news

Breath of the Wild on Switch Offers New Way to Obtain Gear
According to the latest patch notes , starting August 9th we'll see the addition of "Tips of the Wild" on the News page. Breath of the Wild's Wii U version has also been updated , and the patch includes "various fixes to improve gameplay".

Police arrest motorist who pointed gun at passing auto on I-35E
On Saturday, Victoria Best posted three photos and a video of a man pointing a gun at her during her Friday commute. But when she came to scrutinise the video, she uncovered the sinister image of the driver drawing his gun.

Bouchard falls to Vekic in 1st Round Action at Rogers Cup
Ekaterina Makarova, Catherine Bellis, Magdalena Rybarikova and Barbora Strycova are also through to the second round. It has been six consecutive tournaments where the player of 23 years was eliminated in his first game.

EnLink Midstream Partners, LP (ENLK) Downgraded by BidaskClub
TheStreet lowered shares of EQT Midstream Partners, from a b rating to a c+ rating in a research report on Thursday, June 15th. Northwestern Mutual Wealth Mngmt Co stated it has 0% in Booz Allen Hamilton Holding Corporation (NYSE:BAH). (NASDAQ:ADI).

Priceline Group nets $720.2 million in second quarter, beating estimates
Over the last five days, shares have faced -2.5% losses and now is down -1.01% since hitting its 200-day moving average of $63.77. Following the completion of the sale, the director now directly owns 346 shares of the company's stock, valued at $642,753.82.

Ex-FBI agent and daughter guilty of killing her husband
A former Federal Bureau of Investigation agent and his daughter were found guilty of killing the daughter's husband on Wednesday. After this, she turned to her mother in the courthouse and said: "I'm really sorry mom, I wish they'd just kill me".

Former Syracuse head coach MacPherson dies at 86
Under MacPherson's leadership, Syracuse won three more bowl games before moving on to the Patriots. MacPherson was 8-24 in two seasons with the Patriots.

Frito Lay opening pop-up Cheetos-themed restaurant
Broadway in Manhattan, will be open to the public by reservation only August 15-17 (visit the website to join the waitlist). To cap off the meal, Cheetos Sweetos-cinnamon-flavored sugar puffs-are used to make cheesecake , cookies and apple crepes.

People Are Pissed At Serena Williams For Saying This About Childbirth
The 35-year-old expectant tennis pro talked to Australian magazine Stellar about how her pregnancy has already prepared her for what's to come this fall.

United States expels 2 Cuban diplomats after incidents in Cuba
Last year, President Obama traveled to Cuba, looking to warm the long-frozen relations with the Communist-run island. Washington and Havana only re-established ties in 2015, following 50 years of hostilities between the two countries.

Watch Kesha Beautifully Perform 'Praying' For The First Time
Luke , Kesha has returned with a new, acclaimed sound and is striking a defiant and liberated tone on the press circuit. Singer Kesha has appeared on Good Morning America to discuss her new album, " Rainbow ", which is released this week.

Met Office warns of heavy and thundery downpours
In their south west summary, Met Office said: "A cloudy and cool day with heavy showers or longer spells of rain for most areas". Travel disruption is possible with a threat of localised flooding with up to 40mm rain falling in a short space of time.

Arsenal eye new Alexis Sanchez deal as PSG focus on Kylian Mbappe
Wenger said: "It was not easy to convince Ospina to stay, but he will play games and fight with Petr Cech to start". But Wenger says his striker remains concentrated on matters at the Emirates Stadium.

Massive, inflatable chicken with orange hair is staring down the White House
How delightfully droll! Quote some Oscar Wilde next! A giant, inflatable chicken that has Trump-esque hair was spotted near the White House on Wednesday.

China Media And Official Both Issue Strong Warnings On War With India
China has also indicated that "it can intervene in Kashmir on Pakistan's request as India did in Doklam on Bhutan's request". China has warned New Delhi not to be drawn into a Western military alliance led by the United States and including Japan.

Other news