Financial institutions should inform their clients, as well as mitigate the risks of an exit from the United Kingdom of the EU without a compromise between the two.
The European Banking Authority (EBA) asked the financial institutions of the region to prepare for a Brexit, a UK exit from the European Union, without an agreement and without a transition period.
“Financial institutions should accelerate their preparations for a possible exit from the United Kingdom of the EU in March 2019, without a ratified withdrawal agreement,” the ABE said in a statement published on Monday on its official website.
He warned that although the United Kingdom and the European Union could reach a political agreement on a transition period for Brexit, it would have no legal effect until there is a Withdrawal Agreement, which is ratified by both parties.
“It is imperative that financial institutions in the European Union and the United Kingdom identify potential exposures and risks that may affect them, and the possible implications of the possible departure of the United Kingdom without a ratified Withdrawal Agreement,” said Andrea Enria, president of the EBA
In particular, financial institutions should take appropriate measures to mitigate the impact without depending on possible solutions from the public sector.
They must also identify and mitigate risks in accessing the infrastructure of the financial and financing markets. In addition to evaluating and taking the necessary measures to address any impact on the rights and obligations of their existing contracts, particularly derivative contracts.
Additionally, clearly communicate to your clients that they could be affected by this and inform their authorities about the actions they are taking.