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Financial Services

Treasury written question – answered on 3rd October 2019.

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Photo of Chris Ruane Chris Ruane Shadow Minister (Wales)

To ask the Chancellor of the Exchequer, with reference to Operation Yellowhammer HMG Reasonable Worst Case Planning Assumptions paragraph 8, if he will list all cross-border financial services and their estimated value to the UK economy which will be disrupted in the event that the UK leaves the EU without a deal.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Working closely with the regulators, the government has legislated extensively to prepare for a No Deal. This includes the Temporary Permissions Regime (TPR) which will allow EEA firms currently passporting into the UK to continue doing so temporarily after Brexit, and a transitional power for regulators to phase in post-exit regulatory requirements for firms where they have changed as a result of the UK leaving the EU.

Following this and wider action by industry and regulators, the Bank of England’s Financial Policy Committee (FPC) judges that “most risks to UK financial stability from disruption to cross-border financial services in a ‘no deal’ scenario have been mitigated”. The FPC have also said that the core of the UK’s financial system is “resilient to and prepared for the wide range of risks it could face, including a disorderly Brexit”. While most risks have been addressed, the FPC is clear that the UK authorities are not able to fully address risks to EEA customers through unilateral action and “in the absence of further action by EU authorities, some disruption is possible.”

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