Financial firms create back-up plans to address Brexit worries
Financial services companies are drawing up contingency plans ahead of Brexit amid concerns the two-year period for Britain to negotiate a deal to leave the EU is too short, an industry body has warned.
Scottish Financial Enterprise (SFE) said the general view in the sector was the negotiating period "is unlikely to provide sufficient time to negotiate the UK's exit arrangement, for the UK Government to redefine its ongoing relationship with the EU or provide the lead time needed for firms to effect any required reorganisation or restructuring".
The warning comes as Michel Barnier, the EU's chief Brexit negotiator, warned the UK it needs to take withdrawal talks "seriously''.
SFE stressed that, overall, the financial services industry in the UK was looking to maintain access to Europe's single market in a way that is "comparable to the levels of access we currently have".
In a submission to MSPs on the Scottish Parliament's Europe Committee, it made clear "companies also want to continue to service their existing EU customers and clients following Brexit, with as little disruption as possible".
Regulators at the Prudential Regulation Authority (PRA) contacted firms in April this year asking for details of their contingency plans for Brexit "covering a range of potential scenarios, including the most adverse potential outcomes". SFE - which represents major banks including Ulster Bank owner Royal Bank of Scotland- said financial services firms were "putting in place contingency plans and structuring solutions on the assumption that various scenarios could apply".
The financial services sector contributes about £120bn a year to the economy.