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‘No-deal Brexit will hit even well-prepared banks’

Published : Sunday, 27 September, 2020 at 12:00 AM  Count : 228

European Central Bank's Supervisory Board Chairman Andrea Enria

European Central Bank's Supervisory Board Chairman Andrea Enria

FRANKFURT AM MAIN, Sept 26: Eurozone banks have readied themselves for the shock of a no-deal Brexit, but will still suffer an economic hit, the European Central Bank's supervisory board chairman said Friday.
Banks have moved in the right direction in terms of cushioning the blow, Andrea Enria told Irish radio, and "are now ready to take the hit, to some extent."
However, "the fact that we are prepared for a shock doesn't mean that the negative effects will not materialise," he said in an interview with RTE Morning Ireland.
"Brexit will of course have macroeconomic effects on top of the impact of COVID-19. And financial markets have not yet fully priced in the possibility of Britain leaving the European Union without a trade deal," the Italian economist added.
The warning comes as companies on the continent, particularly in Germany, are losing hopes of a deal, according to a report in Bloomberg News.
Many banks based in Britain have applied for licences in continental Europe to continue to serve customers on both sides of the Channel.
More than 60 financial institutions "are in the process of establishing or considerably strengthening their presence in Germany," the country's banking supervisor Bafin told AFP.
US bank JP Morgan said earlier this week it would shift some 200 billion euros ($233 billion) of assets from Britain to Frankfurt, Bloomberg reported.
The Brexit impact will be "on top" of the effects of the pandemic, to which banks will have to continue to adapt, Enria said.
He said banks may have to consider extending payment breaks to customers, and to "eventually distinguish good customers from bad customers that are unlikely to pay."    -AFP









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