Sunday 22 April 2018

Core of financial system would be robust to no-deal Brexit, says Bank official

Ben Broadbent said the Bank of England had not forecast for a no-deal Brexit.

Ben Broadbent
Ben Broadbent

By Harriet Line, Press Association Political Staff

A Bank of England official has said the “core” of the financial system would be “robust” if Britain leaves the European Union with no deal.

Bank deputy governor Ben Broadbent said the organisation had not modelled such a scenario in its forecasts.

But he told BBC Radio 4’s Today programme: “We have forecast, as very long run outcomes, a range of possible deals and we have also said we assume in our forecasts that there will be a smooth transition to those, which essentially means we’re not assuming a no-deal outcome.”

Mr Broadbent continued: “What is true, is that the Financial Policy Committee, and I think this is the right way round, which worries about, or thinks about, sort of tail risks, potential disruptions – that’s its job really – has modelled various aspects of what could happen without a deal and was able to say at the end of last year that the stress test that it puts on the banking system once a year to try and see whether it’s got enough capital was at least as severe we thought as a no-deal outcome.

“So we do think, and I think this is very important, that the core of the financial system – given how much capital has been added – would be robust to such an outcome.”

Press Association

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