Bilateral Accord ‘Necessary’ for Post-Brexit UK-EU Ties – Bank Of England
AP Photo/ Matt DunhamBusiness19:54 09.10.2017Get short URL
A Bank of England’s spokesman told Sputnik that the UK and the EU should conclude an agreement to protect financial exchanges between UK and EU entities.
LONDON (Sputnik) — The Bank of England (BOE) believes that a bilateral deal between the United Kingdom and the European Union is needed to safeguard financial exchanges between UK and EU entities after the former leaves the bloc, the bank’s spokesman Sanjay Odedra told Sputnik.
“What we’re really stressing is that some form of a continued bilateral treaty is absolutely necessary when it comes to continued financial exchanges between the UK and the continent,” Odedra said.
He also urged negotiators on both sides not to postpone the discussion of this issue.
“We can’t really say what form such an arrangement might take, but it’s important that we take this seriously sooner rather than later. Financial exchanges between British and EU entities obviously require a great deal of procedure and structure in order to be effective, and that’s something we’re saying can’t be just neglected or left to a later date,” he added.
The comments come in the wake of concerns from the BOE that a hard Brexit could cause lending to UK businesses to cease as European financial bodies struggle to operate within the United Kingdom. While emphasizing that the United Kingdom is an “important hub” for global finance, the BOE remains concerned as to the possibility of impending and substantial disruption to financial services between UK and EU businesses, most particularly those involving the extension of credit to UK clients.
The bank specifically fears that lending to UK businesses could ultimately ease off in the face of a lack of preparedness from entities within the European Economic Area (EEA) to tackle legislative hurdles prompted by Brexit, given that 10 percent of lending to UK business involves firms and financial service providers still located within the EEA, according to the Bank’s Financial Policy Committee (FPC).