Bank told to provide details of preparations for cliff-edge Brexit

The Bank of England has been asked to reveal how City firms are preparing for a cliff-edge Brexit,inoneofnickymorgan’s first moves as Treasury Select Committee chairwoman.

The MP has written to the chief executive of the Prudential Regulation Authority (PRA), Sam Woods, calling for a summary of company contingency plans and details on whether those plans pose a threat to financial stability.

It comes after the PRA asked all banks and financial firms with cross-border activities between the UK and the EU, 0 Nicky Morgan is calling for a summary of contingency plans including subsidiaries of US investment banks based in London, to detail preparations for all scenarios in the Brexit negotiations, including a “no deal” outcome.

Firms were expected to respond by 14 July. In a letter dated 24 July, Ms Morgan asked for details about the “nature and timing” of the actions firms are prepared to take in the case of a no deal scenario, and what influence their organisational structure, or the type business they conduct, has on those plans.

She has also asked whether firms are waiting for details of their competitors’ plans before embarking on their own, and if the simultaneous execution of those contingency plans might pose a “material risk” to financial stability.