European Union regulators urged banks, investors and customers on Thursday to take “timely action” to avoid disruption to cross-border derivatives and insurance contracts caused by Brexit.
Britain leaves the EU in March 2019 and a “standstill” transition deal until the end of 2020 agreed last month won’t be formally ratified until October or later.
“Contingency planning should consider timely responses to all potential challenges, such as contract continuity and possible relocations,” said a joint report from the EU’s banking, insurance and markets regulators on risks to the financial system.
In the short term, Brexit may affect the access of EU households and companies to financial services provided in Britain and may affect market confidence, it added.
British regulators have said that last month’s transition deal means that EU banks with branches in London don’t have to rush to apply for new UK licences by March next year.