Insisting It’s Ready For Brexit, ECB Urges Banks to Fulfill Plans

(Bloomberg) -- The European Central Bank said it’s closely monitoring financial markets and is ready for all contingencies from Brexit, in a statement of reassurance on the eve of Britain’s final departure from the European Union.

The ECB stands ready to lend pounds to euro-area banks if needed via a currency-swap arrangement with the Bank of England, according to an emailed statement. It also said both central banks are determined to maintain good cooperation in banking supervision, and urged European banks to press ahead with their Brexit plans.

“It is with great regret that we see our British friends leave the European Union,” ECB President Christine Lagarde said. “We will work hard to ensure Brexit causes as little disruption as possible for the citizens, employers and financial markets in the euro area and the rest of the EU.”

The ECB’s subscribed capital of 10.8 billion euros ($11.9 billion) will remain steady following the BOE’s departure of the Eurosystem, with its share of 58 million euros to be reallocated among remaining national central banks.

Britain and the EU will formally part ways on Friday night and have the next 11 months to thrash out the terms of their future relationship. Negotiations are expected to be fraught and both side are already at odds in some areas, including financial services.

European Commission President Ursula von der Leyen has warned that the U.K.’s access to the single market depends on how far the country agrees to abide by the bloc’s rules. Britain’s Prime Minister Boris Johnson wants a clean break from EU regulations.

In the run-up to Brexit, the ECB processed some 25 licensing procedures for banks relocating to the euro area and assessed Brexit plans of those maintaining their U.K. branches. On Thursday, it urged banks to honor previous commitments and agreed timelines for putting those plans into action.

To contact the reporter on this story: Piotr Skolimowski in Frankfurt at pskolimowski@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Jana Randow

©2020 Bloomberg L.P.