Brexit: avoiding a cliff edge in financial services
With less than six months until the UK leaves the European Union, businesses across Europe face significant political and regulatory uncertainty. Brexit is unprecedented in its scale and complexity and creates uncertainty for all sectors of the economy, but particularly for firms which have a large share of cross-border business including wholesale banks. This article focuses on the practical challenges which wholesale banks face in their preparations for 29 March 2019. To ensure an orderly withdrawal process and provide additional time for businesses to adapt, a transition period to the end of 2020 remains critical. It is important that an agreement on the Withdrawal Agreement is reached as soon as possible to provide certainty of the transition period. In the absence of certainty that there will be a transition period, firms are implementing their contingency plans to ensure that they can continue to service their clients and a number of operational and practical challenges remain. These include significant risks that urgently require policymakers and regulators to work with the industry on solutions. Given the extremely tight timescales, these issues have to be addressed as a matter of urgency by policymakers and regulators to ensure an orderly withdrawal which minimises disruption to clients and consumers and safeguards financial stability across Europe.