EU watchdog boss confident ‘no imminent risk’ to banks from no-deal Brexit
A no-deal Brexit would bring no imminent risks to Eurozone banks, the head of an EU banking watchdog has said.
Elke Koenig, head of the Single Resolution Board (SRB) – which deals with failing banks – said EU and UK financial institutions, as well as Eurozone lenders, had put in the preparations to avoid financial stability.
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“There will be volatility, but given the level of preparations I hope and I am convinced there should be no imminent risks to financial stability [in a no-deal Brexit],” Koenig told a press conference.
Her comments come ahead of a fresh deadline of 12 April for the UK to secure a deal to avoid crashing out of the EU without a deal.
But Koenig said a no-deal Brexit would have economic consequences.
“The impact on real economy might have repercussions on the banking sector, but I am not expecting the problem to come straight from the banking sector,” she said.
Earlier this week ratings agency Moody’s said that all large UK banks had taken steps to mitigate the loss of passporting rights in a no-deal Brexit, primarily through establishing subsidiaries in the EU.
It said the potential loss of passporting – which allows financial services to operate across borders – would be credit neutral as all banks had worked to ensure operational continuity.
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Contingency plans, such as launching new EU hubs and moving staff, had become so advanced they were unlikely to be reversed even if a divorce deal was struck, Moody’s said.
But increased operating costs would be manageable, it added.