ECB on Brexit: prepare for abrupt end to the UK’s access to the EU single market
The ECB recently published a press release about its expectations regarding risks for banks associated with the Brexit negotiations.
"Core capabilities need to be located in the euro area from day one (30 March 2019)."
According to the ECB, a smaller number of banks with limited activities in the EU have not yet submitted their Brexit plans to the ECB and other banks have not yet made their final decisions. ECB stated, that they lack detailed plans about their future set-up in the euro area, or have not shown sufficient progress in their relocation activities. This approach raises concerns ate ECB as time is limited and the uncertainty over reaching a final political agreement remains. In the possible absence of a Withdrawal Agreement ratified on time by both parties, banks should be prepared for all contingencies, including the possibility of there being no transition period but rather an abrupt end to the UK’s access to the EU single market.
ECB explicitly mentions steps to be done, those are
the relocation and recruitment of key staff;
the on-boarding of clients, including the amendment or replacement of contracts;
and the establishment of infrastructure such as information technology, financial market infrastructure access, and real estate.
