Yahoo Finance City watchdog readies for no-deal Brexit as Brussels sounds warning
The City watchdog has joined Brussels in warning that plans for a no-deal Brexit must be stepped up amid fears that firms won't be prepared next March.
Speaking a week after finance bosses were told the Brexit model they wanted is off the table, the Financial Conduct Authority's (FCA) head of international strategy, Nausicaa Delfas, said the agency was planning for the UK to leave the EU without a trade deal.
"We must prepare for all scenarios, including the possibility of a 'no-deal' or 'hard' Brexit at March 2019," she told executives in London on Thursday.
"And that is what we are doing: across the FCA, together with colleagues from the Bank of England and the Government, we have been working to develop a number of safeguards and contingencies, in the event of a hard Brexit, to ensure that 'day one' works smoothly."
Her speech coincided with the European Commission's warning to EU countries that they should be ready for a no-deal Brexit, just as the UK's new Brexit secretary Dominic Raab arrives in Brussels for his first round of talks.
"We all know that time is tight and the path uncertain, so achieving [..] a smooth transition [and] avoiding cliff edges requires energy and commitment from industry and regulators alike," Ms Delfas said.
City bosses had hoped UK and EU firms would enjoy a mutual recognition of rules post-Brexit but were dealt a blow last week when that option appeared to be off the table. The Government is instead opting for a new arrangement that would expand on the EU's so-called equivalence regime.
Lobby group TheCityUK called the decision "regrettable and frustrating" in response to the decision last week while the City of London Corporation said it was a "real blow" for financial services.
Nicky Morgan, chair of the Treasury Select Committee, said she was not surprised that the FCA is preparing for a no-deal Brexit.
"It's a great shame that everyone's having to spend such a great amount of time preparing something we all hope and expect isn't going to happen," she said.
