Connect with us


Banks preparing emergency lending for no-deal Brexit



chinook ch-47
Army is on standby to deliver food, medicine, and

Rieger / FEMA

  • Big banks are ready to lend money to UK businesses in
    order to prop up the economy in the event of a no-deal
  • The bank lobbying body, UK Finance, said it was ready
    to help coordinate lending as it did following the collapse of
    Carillion and Monarch Airlines,
    The Telegraph reported.
  • Ministers have drawn up contingency plans for a no-deal
    exit from the EU and have put the Army on standby to deliver
    food, medicine, and fuel.

LONDON — Major banks are preparing to support UK businesses with
credit if Britain falls out of the EU next March with no deal on
future relations with the bloc, highlighting just how disruptive
crashing out of the EU could be to the UK economy.

The Telegraph
reported on Sunday that CEOs and banking
lobbying groups are ready to extend lines of credit to soften the
economic blow by blockages in trade and financial flows in the
event of a no-deal Brexit. Officials at the Bank of England’s
Prudential Regulation Authority (PRA) have reportedly begun talks
with lenders in recent weeks over how they can help buttress the

The report came on the same day as
The Sunday Times reported
that the government has put the
army on standby in case of a disruptive Brexit,
drawing up plans for them to deliver food, medicine and fuel to
keep the country moving.

Prime Minister Theresa May’s government hopes to reach a final
agreement on Britain’s post-Brexit relationship with the EU at a
key summit in October. But Europe’s chief negotiator Michel
Barnier has called into question the viability of the UK’s
proposals, saying there are elements of the government’s proposed
deal that he doesn’t understand.

The comments raise the risk that Britain could fall out of the EU
without a deal when the Brexit deadline is reached next March.
This would likely cause huge disruption to everything from
medicine and food supplies to car manufacturing.

One executive at a FTSE 100 bank told The Telegraph: “Extending
credit to firms impacted is one thing we’re looking at. It’s a
bit Dunkirk spirit type of stuff. But banks are in reasonably
good shape and can cope.”

Banking lobbying body, UK Finance, told the Telegraph it is ready
to help coordinate lending from the banks as it did following the
collapse of outsourcing firm Carillion and Monarch Airlines. The
funding could be used to help firms who are incurring extra costs
from supply chain delays or other effects of a no-deal Brexit.

Stephen Jones, chief executive of UK Finance, told the Telegraph:
“If the industry, the Government, and the regulator want us to
act as a convener of the industry we will, of course, do that.”

Banks themselves have concerns over the enforceability of
billions of pounds of cross-border contracts, customer data
transfers, and access to the European payments system.

The unnamed FTSE 100 banking executive told the Telegraph: “We
want to make sure we don’t make a bad situation humongously
worse. We’re thinking about what to do in a no deal storm… If
there are huge queues of lorries at Calais and Dover, what is the
banking equivalent of that?”

Continue Reading
Advertisement Find your dream job