U.K. Presses Ahead With No-Deal Brexit Plans for European Financial Firms

(Bloomberg) -- The U.K. published fresh plans to keep European financial firms operating in the U.K. in the event of a no-deal Brexit.

The government released a draft proposal on Tuesday that would give firms from the European Economic Area -- the EU plus Iceland, Liechtenstein and Norway -- as well as non-U.K. central counterparties the temporary recognition they’d require to continue operations.

While the Bank of England has said that such firms can plan on the assumption that there will be a transition period to arrange authorizations, this instrument would provide protection in the event of a hard Brexit.

Britain’s banks and regulators have warned that trillions of dollars of contracts are at risk if the U.K. crashes out of the EU in March without a deal, leaving firms without the authorizations they need to service them. The temporary permissions outlined by the U.K. aim to “provide confidence that a back-stop will be available,” the BOE said in an emailed statement.

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