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24 July 2018

Bloomberg: UK presses ahead with no-deal Brexit plans for European financial firms

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The government released a draft proposal that would give firms from the European Economic Area -- the EU plus Iceland, Liechtenstein and Norway -- as well as non-UK central counterparties the temporary recognition they’d require to continue operations.

While the Bank of England has said that such firms can plan on the assumption that there will be a transition period to arrange authorizations, this instrument would provide protection in the event of a hard Brexit.

Britain’s banks and regulators have warned that trillions of dollars of contracts are at risk if the U.K. crashes out of the EU in March without a deal, leaving firms without the authorizations they need to service them. The temporary permissions outlined by the U.K. aim to “provide confidence that a back-stop will be available,” the BOE said in an emailed statement.

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