Governor of the Central Bank of Ireland Philip Lane calls for Brexit transition periods

Hayley Kirton
Follow Hayley
The governor added he and his team were more than prepared for a sudden wave of applications (Source: Getty)

The governor of Ireland's central bank has become the latest in a long list of names to call for transition periods for Brexit.

"In addition to obtaining clarification on the nature of the new steady-state framework for trade in financial services between the EU and the UK, it will also be important to specify transition arrangements, especially given the long-term nature of many financial contracts," said Philip Lane at the Barclays European Financial Capital Summit.

"It follows that the provisional Brexit plans that are currently being formulated may have to be revised over time, if the course of these negotiations take unexpected twists. The value of optionality is high in the current environment: as the negotiations unfold, some options will lose value, while others will gain."

Read more: What will happen to the pound after Theresa May triggers Article 50?

Many others have called for transition periods to be put in place. In January, Bank of England governor Mark Carney warned there would be some fallout for the UK if Brexit was badly managed with no transition periods, although the consequences "would be greater for Europe than the UK".

Meanwhile, Sabine Lautenschlaeger, a key member of the governing council of the European Central Bank, said UK banks could be granted very generous transition periods following Brexit – provided they were willing to shift a substantial chunk of their operations into one of the EU27.

However, last December, Michel Barnier, the man who will be responsible for leading the Brexit talks on behalf of the European Commission, said a "very limited transition" deal could be possible, but only once British officials had indicated the type of relationship they wish to have with the EU going forward.

Read more: Sadiq Khan announces London-Paris business partnerships

Also in his speech today, the Central Bank of Ireland governor revealed his team were more than prepared should Brexit trigger a sudden wave of applications for licences, noting the central bank had set up new teams to deal with authorisation queries.

"A substantial proportion of Brexit-related queries at this stage relate to a further scaling up of already-sizeable lines of activity or an expansion of the range of activities of currently-licensed financial entities," Lane added. "That said, Ireland is likely to become a host to new categories of financial services. Accordingly, we stand ready to expand our range of supervisory activity as required."

Related articles