Bailey Says ‘So Far, So Good’ on Brexit Transition: BOE Update

Andrew Bailey, chief executive officer of the Financial Conduct Authority (FCA), attends the launch of the COP26 Private Finance Agenda in London, U.K., on Thursday, Feb. 27, 2020. In a world facing a climate crisis, investors need to start taking account of carbon emissions and rising temperatures in their decisions, according to Bank of England Governor Mark Carney.
Andrew Bailey, chief executive officer of the Financial Conduct Authority (FCA), attends the launch of the COP26 Private Finance Agenda in London, U.K., on Thursday, Feb. 27, 2020. In a world facing a climate crisis, investors need to start taking account of carbon emissions and rising temperatures in their decisions, according to Bank of England Governor Mark Carney.

(Bloomberg) -- In his first comments since the Brexit transition period ended, Bank of England Governor Andrew Bailey said the process has been “so far, so good” -- with financial stability risks mostly mitigated.

“A certain amount of business is having to migrate to the European Union,” Bailey said in a virtual meeting of Parliament’s Treasury Committee on Wednesday. “Those transitions have broadly happened as far as we can see.”

Senior central bank officials are giving their first update to U.K. lawmakers since Brexit fully took hold and since Prime Minister Boris Johnson ordered the country into a third coronavirus lockdown. The reaction to Brexit in parts of the financial markets has been swift, with nearly all trading in European shares fleeing London for venues in Amsterdam and Paris to comply with EU policy.

Bailey also said that finance job losses from Brexit may be less than speculated, estimating that 5,000 positions have migrated to the EU so far. He criticized the EU for its approach as the U.K. seeks an equivalence arrangement governing cross-border financial services, saying the bloc’s desire for more information from Britain is “problematic.”

The committee is set to ask Bailey about the stability of the British financial system, banks’ ability to resume dividend payouts and the future of financial regulation now that the U.K. is free to set its own rules outside the EU.

Other speakers at the hearing include Sam Woods, chief executive officer of the BOE’s Prudential Regulation Authority, and Donald Kohn, an external member of the Financial Policy Committee.

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