14th October 2018

Standard & Poor's publishes Countdown to Brexit report

Less than six months remain until the UK is due to exit the EU in March 2019. Nevertheless, financial institutions(FIs) find themselves preparing for Brexit with few of the basic
political questions answered-questions that will guide future economic performance as well as regulation and policymaking.
As noted in a report published this week by S&P Global Ratings, some FIs have now reached the point of no return, and have started to trigger aspects of their contingency plans-such as cross-border legal entity mergers and the
establishment of additional licensed entities. Such actions are unlikely to be reversed even if the UK, against all expectations, decided to stay in the single market and/or EU. As the autumn progresses, sustained uncertainty about
the political outcome will lead FIs to take further steps in order to position themselves for what they have to assume will be a disruptive Brexit in March 2019. For rated FIs, the most immediate implication from Brexit is one of risk mitigation. In this respect, the significant uncertainty, so late in the day, about the extent and terms of any political agreement is hugely unhelpful for FIs. While S&P see the industry as increasingly well prepared in many respects, FIs and their regulators still have a lot of work to do and, if there is no political deal that allows an orderly transition, they would have precious little time to deliver.
Full report at S&P Ratings Direct.

Standard & Poor's Trends(491 articles)