EBA has published an Opinion in which it asks national regulators to ensure financial institutions are taking practical steps to prepare for a “no deal” Brexit with no transition period. It does not think institutions have been moving quickly enough in their planning and is concerned they are delaying triggering necessary actions.
EBA notes that the political agreement on a transition period will not have legal effect until there is a ratified Withdrawal Agreement in place. It says firms should be prepared for all scenarios and, in particular, should:
- ensure they have the right regulatory permissions and associated management capacity in place ahead of time;
- consider the risks around access to financial market infrastructures and funding markets and how they can mitigate these risks;
- assess and take necessary actions to address any impacts on rights and obligations under existing contracts, particularly derivatives contracts; and
- remember their duty to communicate clearly to customers – and warn them of the potential impact on them of Brexit-related issues.