RegulationAug 1 2017

New Treasury committee chair demands Brexit answers

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New Treasury committee chair demands Brexit answers

The new chair of the Treasury Committee has warned businesses are facing a Brexit cliff edge in 2019.

Nicky Morgan said the financial services sector was a particular concern and has asked the Bank of England’s Prudential Regulation Authority how banks and insurers will prepare for Brexit.

In a letter to the chief executive of the Prudential Regulatory Authority, Mrs Morgan asked what the key risks of a ‘no deal’ scenario are for the industry.

The Treasury Committee chair, who is also Member of Parliament for Loughborough, asked the PRA – the body which regulates the banks and insurers – whether a transitional arrangement with the EU, to provide more time to negotiate and prepare for a new economic relationship with the UK, would be desirable.

She said: “Getting these arrangements right will be crucial for ensuring that the City retains its pre-eminence as a global financial centre, and to protect the economy and jobs as the UK leaves the EU.”

It comes after chief executive of the PRA Sam Woods wrote to banks and insurers in April to ask about their contingency plans for the ‘most adverse potential outcomes’ when the UK leaves the EU.

Mr Woods gave the industry a deadline of July 14 to respond.

Writing to the chief executive, Mrs Morgan said she "would be grateful for some details on the outcome of this exercise" and asked whether all firms had responded to the request.

Mr Woods has been asked to respond by August 2.