Hard Brexit? The EU’s Got a Plan for That, Finance Official Says
(Bloomberg) -- The European Union has a plan up its sleeve to avert market chaos in case of a no-deal Brexit, according to a senior financial-services official.
“We have the measures in place, whether it’s a soft or a hard Brexit,” said Patrick Pearson, who runs the financial-markets infrastructure unit at the European Commission, the EU’s executive arm. “We know what to do.”
The Bank of England stepped up pressure on the EU this week to help stave off the threat that a no-deal 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 has largely insisted that it’s up to companies to prepare for the worst.
The EU has made “only limited progress” in mitigating the risks of a disorderly departure, the BOE said. John Glen, economic secretary to the U.K. Treasury, drove that point home on Wednesday, warning that the risks must be addressed in “a matter of weeks.” This is “a political decision that the EU will have to come to terms with,” he said.
Pearson’s broad-brush assurances echoed comments by Daniele Nouy, the European Central Bank’s head of supervision, who said the ECB is “ready to help ensure a smooth Brexit -- no matter the outcome of the political negotiations.”
The commission is “in contact constantly with the market” and ready to respond “at the right time -- not too early, but at the right time with any measures,” Pearson said at an event in Brussels.
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