There has been published a letter from the PRA to Nicky Morgan MP, Chair of the Treasury Committee.
In the letter the PRA explains that the main purpose of its letter of 7 April 2017 to banks, insurers and designated investment firms undertaking cross-border business between the EU and the UK was to ensure that all such firms are making sensible contingency plans concerning Brexit. This includes contingency planning for a scenario in which there is no agreement at the point of exit and no implementation period.
The PRA states that it has received 401 responses to its 7 April letter. Of these responses, 147 were from banks and designated investment firms and 254 were from insurance companies. The PRA explains that it is in the process of analysing these responses in detail, and are examining both the detail of individual plans, to ensure that each firm undertakes sufficient preparations, and firms’ plans collectively, to identify whether there are broader financial stability risks that could arise from the collective execution of the contingency plans, and any thematic issues or concerns that could give rise to risk. This analysis will then be considered by the Prudential Regulation Committee and Financial Policy Committee, and it is expected that such committees will reach a view in the autumn.
View PRA letter – Firms’ contingency planning for the UK’s withdrawal from the EU, 2 August 2017
This briefing also features as a post on our Financial services blog: Regulation tomorrow.