View source for Bank warns EU to take action to prevent financial havoc after Brexit

The Bank of England has said the EU needs to do more to prevent Brexit causing havoc in [http://Www.Martindale.com/Results.aspx?ft=2&frm=freesearch&lfd=Y&afs=markets markets] as it warned that trillions of pounds worth of financial products could be at risk.<br><br>In its bi-annual financial stability report, the Bank said progress has been made in protecting UK households and businesses against Brexit disruption but �material risks remain�.<br><br>It said that, while the UK is putting in place a temporary permission regime to allow financial firms to continue trading across Europe after next March, the EU has not yet instigated similar measures.<br><br>The City of London<br><br>There�s been progress to avoid disruption to financial services during Brexit, but more needs to be done. The UK will legislate if necessary to avoid disruption. A technical working group has been established, chaired by the European Central Bank and the Bank of England. pic.twitter.com/xCABnqU0Ah<br><br>- Bank of England (@bankofengland) June 27, 2018 This could leave around �29 trillion of so-called derivatives contracts at risk, as well as 10 million UK insurance policyholders and another 38 million in the EU, the Bank revealed.<br><br>On Brexit disruption preparations, it said: �Progress has been made, but material risks remain.�<br><br>It added: �The biggest remaining risks of disruption are where action is needed by both UK and EU authorities, such as ensuring the continuity of existing derivatives contracts.<br><br>�As yet the EU has not indicated a solution analogous to a temporary permissions regime.�<br><br>Our latest #FinancialStabilityReport highlights how we�re making the financial system resilient to risks and prepared to avoid future disruption. website pic.twitter.com/lpH99MFe2T<br><br>- Bank of England (@bankofengland) June 27, 2018 Its warning to the EU to take action comes just days after Europe claimed UK banks were not prepared enough for Brexit.<br><br>UK lenders are not thought to be exposed from the derivative crunch, with loan funds and other financial firms instead at risk.<br><br>The Bank is hoping to make progress on convincing the EU to guard against the risks through a working group chaired by Bank governor Mark Carney and European Central Bank boss Mario Draghi, which was set up in April.<br><br>Firms will have to show they can restore services quickly after cyber-attacks. Firms will be subject to [http://Pixabay.com/en/new-zealand-waterfall-nature-cyber%20stress/ cyber stress] tests and will need to prove they can recover quickly, or agree remedial plans with us. pic.twitter.com/BxCZY2OgmT<br><br>- Bank of England (@bankofengland) June 27, 2018 The report also revealed the Bank�s Financial Policy Committee (FPC), which is headed by Mr Carney, plans to launch a new cyber attack test for UK financial firms and banks next year.<br><br>It will test how quickly vital services can be restored following a cyber attack and comes in the wake of recent IT woes at TSB and [https://www.visatutuc.vn/dich-vu/visa-han-quoc/ visa hàn quốc], which affected millions of customers after lengthy service outages.<br><br>On borrowing, the report said lending in the UK remained �materially� below 2008 levels, with little evidence that households and businesses are becoming over-indebted.<br><br>But it flagged up a boom in non-bank lending to riskier companies and those who are highly indebted.<br><br>The Bank also warned of a more gloomy global outlook, with emerging markets facing soaring costs of borrowing in US dollars due to recent US interest rate hikes and depreciating local currencies.<br><br>It said major UK banks were exposed to emerging economy risks, equivalent to 15% of their assets.<br><br>The Bank also highlighted risk with US firms becoming indebted and reliant on cheap finance, as well as continuing rising debts in China and the recent political woes in Italy.<br><br>Advertisement