Brexit: What are the challenges for the financial sector?

Posted on Dec. 2020 at 15:59

Whatever the outcome of the current Brexit negotiations around a possible trade agreement, from January 1, the European financial sector will no longer be able to operate freely on either side of the Channel. The subject had not been included in the discussions around a trade agreement, and the situation that will prevail next year does not depend on the adoption of this agreement. If the volatility of the pound has increased a notch this year, regulators want to be reassuring. They say they are convinced that European financial stability will not be called into question on January 1.

The Bank of England (BoE) said on December 11 that major UK banks were strong enough to endure both the coronavirus crisis and the consequences of Brexit. For the BoE, if “ most of the financial stability risks associated with the disruption of cross-border service provision have already been mitigated “, It does not exclude, after December 31, a certain” market volatility and disruption in financial services, in particular for clients established in the Union “.

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