The Loan Market Association (LMA) has responded to the UK Treasury Committee’s call for evidence on EU exit and transitional arrangements, in preparation for the start of official negotiations upon the triggering of Article 50.
The LMA response sets out the need for transitional arrangements for the loan market following the UK’s exit from the EU. The LMA points out that the loss of the CRD passport will have a major impact on some lending and loan market activities conducted by banks in and through the UK, unless mitigating measures are agreed, including a transitional period following exit from the EU.
Nicholas Voisey, LMA Managing Director commented that “a sudden withdrawal of passporting rights could affect both the enforceability of existing loan agreements and the ability and willingness by lenders based in the UK and EU-27 to enter into future agreements. Transitional arrangements are required to avoid these damaging effects. In the absence of such a commitment, lenders based in the UK and EU-27 may start withdrawing lending activity, as well as existing agreements being affected, prior to the EU exit.”