Finance firms have more Brexit preparation work to do: EBA
London
EUROPE'S top banking regulator warned the financial industry to step up preparations for a no-deal Brexit in just three weeks' time amid signs that trade talks are on the verge of collapse.
The Paris-based European Banking Authority (EBA), which coordinates regulatory standards across the bloc, said some financial firms still haven't rolled out their contingency plans, though the broader industry has made progress.
Payment firms that have only recently applied for authorisation to do business in the European Union may not receive the approval they need in time, the EBA said.
"They should ensure that adequate management and risk management capabilities are in place in the EU and that their EU customers' exposures have been transferred into entities domiciled in the EU," the regulator said in a report on risks facing the European banking industry.
With Brexit talks in their final intense stretch, the financial industry is finishing off plans for a historic rupture in European markets.
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Wall Street's biggest banks including JPMorgan Chase, Morgan Stanley and Goldman Sachs, which have long relied on London for their European hubs, are in the process of moving hundreds of billions of euros in assets and hundreds of employees to the EU.
Among the regulator's other findings, based on data as of the end of June 2020 are that loan quality is expected to deteriorate because of fallout from Covid-19 and the wind-down of emergency government support programmes; and that banks have significant exposures that are vulnerable to climate change, with more than 50 per cent of exposures to large corporates potentially at risk, especially in manufacturing, electricity, construction, transport and real estate. BLOOMBERG
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