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Brexit Puts Trillions of Pounds of Contracts at Risk, BOE Says

  • Impairment to servicing could disrupt market functioning
  • Tens of thousands of counterparties could be affected
Updated on

The Bank of England said an agreement is needed as part of the Brexit process to protect the “long-term validity” of 20 trillion pounds ($27.1 trillion) of existing derivative contracts.

The BOE’s Financial Policy Committee said on Monday that after the U.K.’s withdrawal from the European Union, it will be “complex and difficult” for financial firms themselves to tackle the risks to continued servicing of contracts between counterparties in the U.K. and the remaining 27 EU countries.