ECB Welcomes Ratification of Agreement on Orderly Brexit
ECB welcomed ratification of the agreement on an orderly withdrawal of UK from EU. In recent months and years, ECB has taken steps to prepare for all contingencies and it will continue to closely monitor developments in financial markets to preserve stability. ECB stresses that banks now need to press ahead with the implementation of their Brexit plans in accordance with agreed timelines.
The ECB President, Christine Lagarde, said: “It is with great regret that we see our British friends leave the European Union. This agreement, however, will pave the way for an orderly and less disruptive departure. We will work hard to ensure Brexit causes as little disruption as possible for the citizens, employers, and financial markets in the euro area and the rest of the EU.” Specifically, ECB has made the following preparations:
- In banking supervision, ECB processed nearly 25 licensing procedures for banks relocating to the euro area and assessed the Brexit plans of 42 euro area banks that will maintain their UK branches after UK leaves EU. ECB now expects banks to implement their plans in line with the commitments they made in the past, including the implementation timelines they agreed with their supervisors.
- ECB and its UK counterparts have taken steps to ensure continued good cooperation in the area of banking supervision, even after the transition period ends. For this, a memorandum of understanding was agreed to allow supervisors to continue exchanging information and to coordinate the supervision of cross-border banking groups.
- ECB and BoE activated a currency swap arrangement in March 2019, through which BoE offers to lend euros to UK banks on a weekly basis. As part of this agreement, the Eurosystem would stand ready to lend pounds sterling to euro area banks if the need arises. This will reduce possible sources of stress in the financial system.
- BoE will leave the European System of Central Banks and its current share in the ECB’s subscribed capital, which stands at 14.3%, will be reallocated among both the euro area national central banks and the remaining non-euro area national central banks on the basis of an updated key for subscription to the ECB’s capital.
Related Links
Keywords: Europe, EU, Banking, Brexit, Withdrawal Agreement, MoU, Banking Supervision, Cross-Border Cooperation, ESCB, ECB
Previous Article
ECB Conducts Risk Assessment for Less Significant Institutions in EURelated Articles
BIS Innovation Hub Sets Out Work Program for 2021
BIS Innovation Hub published the work program for 2021, with focus on suptech and regtech, next-generation financial market infrastructure, central bank digital currencies, open finance, green finance, and cyber security.
EC Plans to Consult on Crisis Management and EDIS Framework Revisions
In an article published by SRB, Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, discussed the progress and next steps toward completion of the Banking Union.
EBA Finalizes Remuneration Standards for Investment Firms in EU
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA Issues Update on Move to New Data Collection Platform
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
