Senior figures from the City of London today hit back at the European Banking Authority (EBA) after the regulator warned that lenders are not prepared for Brexit.
The EBA today said that financial firms in the UK who provide services to clients in the rest of the EU were not adequately prepared for withdrawal, and that cost-conscious firms are risking financial stability.
London-based firms are “delaying triggering the necessary actions” on Brexit contingency plans, it said in a statement. Firms should assess whether continued market access of EU firms to the UK, or vice versa, is “necessary or desirable”, which could result in “withdrawing from the relevant market”, the EBA said.
However, City bosses balked at the criticism. Miles Celic, chief executive officer of TheCityUK, said that London’s financial services firms have “had contingency plans in place for months” and have a “constructive, ongoing dialogue with regulators and government”.
Some in the City have expressed frustration with the lack of movement on the EU side to solve the key outstanding issues for cross-border trade, including ensuring that contracts continue to be legally applicable after Brexit.
Catherine McGuinness, policy chairman of the City of London Corporation, tonight rebuked European regulators for not matching assurances given by the UK to financial services firms.
“The Bank of England and HM Treasury understood that firms’ progress on contingency planning would be difficult to complete by the March deadline,” she said. “They took the practical and necessary steps to ensure it would be ‘business as usual’ for EU firms operating in the UK until January 2021.”
“We have not seen this move reciprocated by European regulators. Institutions such as the EBA could help move this forward, for the benefit of customers across the EU and UK.”