US economy

Carney Says No-Deal Brexit Threat to Markets Requires EU Action


© Bloomberg. Mark Carney, governor of the Bank of England (BOE), gestures while speaking during the bank’s quarterly inflation report news conference in the City of London in London, U.K., on Thursday, Nov. 1, 2018. The BOE hinted there may be a need for faster rate increases in the coming years in a report dominated by uncertainty over Brexit. Photographer: Chris Ratcliffe/Bloomberg

(Bloomberg) — Bank of England Governor Mark Carney said it’s time for the European Union to put its money where its mouth is when it comes to averting market turmoil in a no-deal Brexit.

While recent assurances from Brussels that the EU will do what’s necessary to prevent disruptions in financial markets are welcome, Carney said, “we need to move from comments to actual legal certainty.”

U.K. regulators have been warning for more than a year about the threat that a cliff-edge Brexit poses to trillions of pounds of derivative contracts and millions of insurance policies. While the U.K. has announced steps to reduce the risks, including a plan to issue temporary licenses if needed, the EU long insisted that companies should be prepared for the worst.

EU regulators have begun to change their tune in the past few weeks. Most recently, the European Commission, the EU’s executive arm, vowed to remove one major source of concern by ensuring that the bloc’s financial firms don’t lose access to London’s clearinghouses even if political negotiations break down and Britain quits the bloc abruptly next March.

Carney said the Bank of England is “quietly confident” that U.K. financial firms are ready for Brexit. Banks have adequate capital and liquidity, and they have contingency plans in place, he said in London on Thursday. The “outstanding issues for the financial sector are largely related to cross-border issues,” he said. The BOE has emphasized the no-deal Brexit threats to derivatives contracts, insurance policies and data sharing.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.