(Recasts with Bank of England statement)
LONDON, June 3 (Reuters) - Banks should prepare for the
possibility of a no-deal in post-Brexit trade talks between
Britain and the European Union, the Bank of England said on
Wednesday.
Britain left the EU in January but is covered by a
transition period that is due to end on Dec. 31. Talks on a
future trading relationship between Britain and the EU entered a
fourth round this week.
"It is fundamental to the Bank of England’s remit that it
prepares the UK financial system for all risks that it might
face," the BoE said in a statement.
BoE Governor Andrew Bailey held a conference call on Tuesday
with Britain's biggest banks in which he emphasised the need to
step up their plans for a no-deal Brexit, Sky News reported
earlier on Wednesday.
The BoE said it meets the leadership of UK banks on a very
regular basis.
"As we have said previously, the possibility that
negotiations between the UK and EU over a future trading
relationship might not conclude in a deal is one of a number of
outcomes that UK banks need to prepare for over the coming
months," the BoE said.
Barclays and RBS declined to comment. HSBC
and Lloyds were not immediately available for
comment.
Britain wants binding commitments from the EU on financial
market access to avoid the country's finance industry suddenly
being cut off from the bloc, which is a major export market for
British financial services.
But the EU has said that British banks, insurers and asset
managers face the limited kind of access given by the bloc to
the United States, Japan and Singapore.
Senior sources at two major banks told Reuters they had been
preparing for a long time to cope with a no-deal Brexit from an
operational perspective, after relocating UK-based staff and
management to new offices in the EU.
Britain's financial services minister John Glen said on
Wednesday that the country's financial services industry was
"world class" and was ready for whatever Brexit outcome.
"I continue to believe that we are still well placed as a
sector, whatever the specific outcomes are of negotiations ahead
of us in the second half of this year," he said on a webinar.
Britain still expects to secure a comprehensive free trade
agreement with the EU, Glen said.
A senior EU official said last week that Britain's financial
services sector should be ready for a no-deal Brexit.
(Writing by William Schomberg, Huw Jones, Sinead Cruise and
Iain Withers, editing by Andy Bruce and Jane Merriman)
