Johnson Throws Spanner Into London Bankers’ Brexit Preparations

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(Bloomberg) --

Boris Johnson may have just given the City of London a new Brexit headache.

The U.K. government has been working for months to make sure financial regulations are enshrined in domestic law in the event of a no-deal Brexit. Johnson’s move Wednesday to suspend Parliament puts this process into limbo, adding extra uncertainty before the Oct. 31 deadline for the U.K. to leave the European Union.

Legislation is pending in Parliament to give policy makers more time to make changes post-Brexit, but the measure hasn’t yet been enacted. If the Financial Services (Implementation of Legislation) Bill doesn’t pass during the current parliamentary session -- which will end in mid-September under Johnson’s plan -- lawmakers will need to push for new legislation in the next session, according to a briefing note from the House of Commons.

There may not be time to do that before November, however. The end of a parliamentary session usually sees uncontentious bills in their final stages rushed through by mutual agreement, a process known as “wash-up.” It remains to be seen whether Johnson has the goodwill to get anything through.

The failure of the bill would make the process of no-deal preparation even more difficult. It adds to uncertainties such as whether the U.K. will be recognized as equivalent in the eyes of the EU regulators, which would allow firms to trade across borders more easily.

©2019 Bloomberg L.P.

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