Valdis Dombrovskis, the EU’s commission vice-president responsible for financial services policy, said on Wednesday that “even after Brexit, the performance of existing obligations can generally continue, so there doesn’t appear to be at this juncture an issue of a general nature linked to contract continuity.”
He said that Brussels had studied the potential impact on both insurance and derivatives contracts, and that “current analysis . . . suggests that preparedness by market participants can go a long way to mitigate the impact of Brexit”.
The assurances run directly counter to fears expressed by the BoE that the validity of some £29tn of derivatives, such as interest rate swaps, could be called into question after a hard Brexit unless EU and UK authorities act to legally ensure their continuity.
[...]Mr Dombrovskis said that Brussels “encouraged all stakeholders to prepare for UK’s withdrawal” and that the European Central Bank was working alongside the Bank of England to analyse potential risks arising from a no-deal Brexit.
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