Bank of England Governor: EU to Suffer Greater Losses From Brexit Than UK

Head of the Bank of England Mark Carney said that the European Union may sustain greater financial losses than the United Kingdom if the two parties fail to negotiate financial terms of the UK withdrawal from the bloc.

MOSCOW (Sputnik) — The European Union may sustain greater financial losses than the United Kingdom if the two parties fail to negotiate financial terms of the UK withdrawal from the bloc, head of the Bank of England Mark Carney said Wednesday.

"I'm not saying there are not financial stability risks to the UK — and there are economic risks to the UK — but there are greater financial stability risks on the continent in the short term for the transition than there are for the UK," Carney said while giving evidence to the Treasury Select Committee, as quoted by The Independent newspaper.

EU entities, from household to governments, may suffer losses because they heavily rely on the lending provided by the UK banks, Carney underlined.

In June, the United Kingdom voted in a referendum to leave the European Union and is expected to begin the divorce negotiations at the end of March 2017.

The access to the Single Market will likely be at the center of the Brexit talks and will probably be tied to the contentious subject of the freedom of movement, which the United Kingdom wants to curb.