Risk of No-Deal Brexit ‘Uncomfortably High’, Bank of England Chief Warns

Risk of No-Deal Brexit ‘Uncomfortably High’, Bank of England Chief Warns

Even though a no-deal Brexit is “highly undesirable”, the risk it will materialize is “uncomfortably high”, according to Bank of England Governor Mark Carney.

“[No-deal Brexit is] a relatively unlikely possibility, but it is a possibility,” Carney told the BBC’s Today program.

He argued having a post-Brexit transition period was “absolutely in the interest” of both the EU and UK.

Britain is set to leave the European Union on March 29, 2019, which is supposed to be followed by 1.5-year-long transition period, until December 31, 2020.

However, a transition period would only be in place if any kind of a withdrawal agreement, or at least a joint Brexit declaration (the criticized “blind Brexit” option) is made.

The Governor of the Bank of England insisted that the UK’s financial system was robust and could withstand shocks.

“”There is a very broad range of potential outcomes to these Brexit negotiations and we are entering a crucial phase… We have made sure that banks have the capital, the liquidity that they need and we have the contingency plans in place, ” he said.

In his words, a Brexit without a withdrawal deal would result in disruptions for business and trade and price hikes, at least temporarily.

“Our job in the Bank of England is to make sure that those things don’t happen. It’s relatively unlikely but it is a possibility. We don’t want to have people worrying that they can’t get their money out,” Carney said.

“We’ve put the banks through the wringer to make sure that they have the capital. Whatever the shock could happen from, it could come from a no-deal Brexit, we’ve gone through all the risks of a no-deal Brexit,” he elaborated.

At the same time, thought, he pointed out that the EU governments also had issues to solve on their part as banks could not cope with all potential financial problems stemming from Brexit.

“The UK has taken all the steps, all the secondary legislation it needs to. The European authorities still have some steps they need to take. We’re having conversations and we expect those to be addressed,” Carney said.

(Banner image: Flickr)

newsletter
Join our mailing list and never miss an update !
The Backstop for All Future Backstops: Didn’t the Brits Think of the Irish Border When Voting for Brexit?

The Backstop for All Future Backstops: Didn’t the Brits Think of the Irish Border When Voting for Brexit?

The UK’s Brexit quagmire – presently rapidly shaping up as an upcoming hard Brexit debacle – has been resembling a very bad sitcom for a while now. With

Trump Adviser Bolton Touts Again US-UK Trade Deal after Hard Brexit but ‘in Pieces’

Trump Adviser Bolton Touts Again US-UK Trade Deal after Hard Brexit but ‘in Pieces’

John Bolton, the National Security Adviser of US President Donald Trump, has once again promised the UK a trade deal with the United States as soon as the

Johnson, Hunt Both Vow Brexit by October 31 in UK Conservatives’ Leadership Debate

Johnson, Hunt Both Vow Brexit by October 31 in UK Conservatives’ Leadership Debate

Both contenders to become the leader of the British Conservative Party, and thus the Prime Minister of the UK, Boris Johnson and Jeremy Hunt, have promised to get