Core of financial system would be robust to no-deal Brexit, says Bank official
Ben Broadbent said the Bank of England had not forecast for a no-deal Brexit.
A Bank of England official has said the “core” of the financial system would be “robust” if Britain leaves the European Union with no deal.
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Bank deputy governor Ben Broadbent said the organisation had not modelled such a scenario in its forecasts.
But he told BBC Radio 4’s Today programme: “We have forecast, as very long run outcomes, a range of possible deals and we have also said we assume in our forecasts that there will be a smooth transition to those, which essentially means we’re not assuming a no-deal outcome.”
Mr Broadbent continued: “What is true, is that the Financial Policy Committee, and I think this is the right way round, which worries about, or thinks about, sort of tail risks, potential disruptions – that’s its job really – has modelled various aspects of what could happen without a deal and was able to say at the end of last year that the stress test that it puts on the banking system once a year to try and see whether it’s got enough capital was at least as severe we thought as a no-deal outcome.
“So we do think, and I think this is very important, that the core of the financial system – given how much capital has been added – would be robust to such an outcome.”