Follow Us

Follow us on Twitter  Follow us on LinkedIn

News

Summer holidays from today … back on 9th September! I wish all my readers Happy Holidays – wherever you are allowed to go!

Why not try our new service? Brexit and the City - the Impact

"Brexit has ended the Golden Age of the City" video with Federal Trust Director Brendan Donnelly

Brexit and the City of London: April 2021 Video Update

 

12 December 2018

Bloomberg: Germany prepares for no-deal Brexit to avert financial turmoil


Germany is trying to mitigate market turmoil from the UK leaving the European Union without a deal by giving British financial firms a chance to continue operations in the country and making relocation more viable.

As the bloc girds itself against potential fallout from Britain’s political crisis, Chancellor Angela Merkel’s cabinet approved new rules that allow Bafin, Germany’s financial regulator, to set transition arrangements for U.K. banks, insurers and other financial companies through the end of 2020. Germany also sought to boost its appeal as a banking hub by loosening its rigid hire-and-fire laws for top dealmakers.

With Prime Minister Theresa May facing a vote of confidence in her leadership on Wednesday, Germany urged British lawmakers to accept the deal that’s been agreed with the EU, as the only alternative is a disorderly exit. The country’s export-led economy is particularly exposed to trade disruptions.

“We don’t have much time, but we do still have a little bit of time,” Merkel said in remarks to lawmakers in parliament in Berlin on Wednesday. “The only thing I can tell citizens in Germany is that we’re working hard on ensuring an orderly Brexit and that, in parallel, we’re preparing for the eventuality that it won’t be orderly.”

Mitigating Risks

Under the draft legislation, Germany will let U.K.-based financial institutions continue EU passporting rights through 2020. The extensions are to maintain existing contracts and will be granted by Bafin on a case-by-case basis.

In addition to possible disruptions for individual companies from a no-deal Brexit, “the mass ending of financial-market contracts, or their transfer to companies that have the required permits, could also lead to market turmoil and cause risks for financial-market stability,” the draft legislation says.

Germany is also easing job-security rules for senior financial executives at large, system-relevant firms. For managers with a base salary of more than 234,000 euros ($265,000) in western Germany, employers no longer have to legally justify the grounds for a termination.

“It will thereby be easier for these institutions to separate from their managers to avert risk for the overall financial system,” according to the Finance Ministry. 

Full article on Bloomberg



© Bloomberg


< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information



Add new comment