“It’ll provide further confidence to financial services firms as we exit the EU.”
These were the words of Chancellor Philip Hammond after it was announced that the European Central Bank and the Bank of England will convene a technical working group on risk management in the period around March 30, 2019 in the area of financial services.
The European Commission and HM Treasury, who asked for the formation of the group, will attend as observers. In addition, relevant authorities will be invited on an issue-specific basis.
According to the terms of reference published by the European Commission, this new technical work is separate from the ongoing negotiations on the withdrawal agreement between the EU and the UK, as well as from the negotiations on the overall understanding of the framework for their future relationship.
It also stated: “The primary responsibility to prepare for Brexit remains with market participants.”
Nonetheless, the announcement was seen as a positive development.
“While banks continue their preparations for all scenarios, it is imperative that the regulators come together to address cliff-edge risks in the interests of financial stability across Europe,” said AFME (Association for Financial Markets in Europe) chief executive Simon Lewis. “It is important that issues such as contractual continuity, access to market infrastructure, and transfers of data are addressed to ensure an orderly withdrawal in all scenarios.”
For TheCityUK CEO Miles Celic, the move is added reassurance that the authorities on both sides are committed to providing greater legal certainty and ensuring a smooth and orderly Brexit.