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The Plan to Avert Banking Chaos In a No-Deal Brexit

Canary Wharf Financial, Shopping & Business District Lit Up For A Winter Lights Festival
Photographer: Chris Ratcliffe/Bloomberg
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Prime Minister Boris Johnson has committed to taking the U.K. out of the European Union by Oct. 31, with or without a deal. Britain’s financial industry and its regulators have been laying the groundwork for departure without an agreement or a transition period -- a so-called no-deal Brexit. The good news: The U.K. and EU have been rolling out contingency plans to smooth the business of banking and securities trading, with the aim of averting financial chaos.

Longstanding working relationships between the City of London financial district and firms on the European continent were built on the rights and privileges inherent in both sides being part of the same jurisdiction. Initial hopes that British firms might maintain full access to the EU through so-called passporting rights, or through a sweeping agreement between regulators, came to nothing, leaving banks and other financial-services companies needing to adopt a range of smaller measures to ready for the upcoming divorce.