The Bank of England says that the UK has made positive “course on” management of financial services risk throughout the UNITED kingdom for the abandonment on the part of the European Union.
But it is also said that there was a lack of a similar action on the part of the EU.
It says that it means “the material risks to remain,” thousands of billions of pounds worth of financial contracts that support the activities that flow between the UNITED kingdom and the rest of Europe.
The results arrive in the bank bi-annual Financial Stability Report.’Risk-mitigated’
The report said that the passage of the EU Withdrawal of the Treasury’s plans for a “temporary” system permissions – continue cross-border financial trade – had weakened the “risk of disruption”.
“The progress has been made in the UNITED kingdom towards the mitigation of risks of service interruption to the availability of financial services in the UNITED kingdom-the end-users,” the report said.
“The EU (Withdrawal) bill has been approved by the Parliament.
“The BRITISH government has committed to legislate, if necessary, to put in place temporary permissions, and the recognition of schemes – in this way, banks [and] insurers to continue their activities in the UNITED kingdom for a limited period of time after the UK left the EU, even if there is no implementation period, thus mitigating a number of risks of interruption of service to customers in the UK.”
But he added: “so far the EU has not indicated a solution analogous to a temporary permission for the scheme. The european Economic area, the customers will remain reliant on UK-based financial companies, to be able to overcome any future barriers through the provision of the service.
“The Financial Policy Committee judges that the material risks remain”.Red lights
The Bank has said that the UNITED kingdom, the banks were sufficiently robust to weather a “messy Brexit”.
But despite the progress, the Brexit risk register still has amber warnings on the progress to ensure that there is a legal and regulatory framework of the plan in place once the Uk leaves the EU.
For the UNITED kingdom, there is only one red warning on the validity of contracts used to ensure that the companies in currency trades, for example, involving institutions in Britain and the EU.
There are believed to be £29 billion value of these contracts, which could become “unusable” after March of next year if action is not taken.
The Bank says that the EU is facing three “red light” problems.
Two contracts and one is on the compensation – the ability to finalize the bids and negotiations between the boundaries between banks, firms and fund managers.
Both sides of face also amber warnings on the ability of banks and asset managers to continue to provide services across borders, as well as the lack of an agreement on cross-border flow of personal data between Britain and the EU.