Bank of England Governor Andrew Bailey told banks to step up their preparations for a no-deal Brexit, a sign of growing fears that Britain and the European Union are unlikely to reach a trade agreement before the end of the year.
During a call with the chief executives of the U.K.’s biggest banks on Tuesday, Bailey said they should accelerate planning for a scenario where the post-Brexit transition period ends without a deal, according to a person familiar with the talks. The call was first reported by Sky News.
A transition period that has largely preserved the pre-Brexit status quo finishes at the end of this year unless British and EU officials agree to an extension. However, any such request must be lodged by the British before the end of June, and Prime Minister Boris Johnson’s government has shown no sign of doing so, despite the coronavirus crisis disrupting trade talks.
Bailey has been hosting weekly calls with the banks, and executives from Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc were on Tuesday’s call, the person familiar with the matter said, asking not to be named discussing private information.
Banks with major operations in the U.K. have already made extensive preparations for Brexit, including establishing new units within EU member states to allow them to continue conducting business.
Spokespeople for HSBC, RBS and the Bank of England were not immediately available to comment. Lloyds and Barclays declined to comment.
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