00:31 GMT04 August 2020
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    MOSCOW (Sputnik) - The Financial Policy Committee (FPC) of the Bank of England on Friday urged regulatory authorities in both the United Kingdom and the European Union to continue taking measures to prevent the "material risks" to a vast number of UK-EU derivative and insurance contracts, coming from Brexit.

    The statement follows the FPC's Monday meeting during which it reviewed the outlook for the country's financial stability.

    "UK and EEA parties may no longer have the necessary permissions to service over the-counter (OTC) derivative contracts with parties in the other jurisdiction. Around a quarter of contracts entered into by parties in both the UK and EEA, with a notional value of £26 trillion ($36 trillion), could be affected," the FPC said in a statement, adding that around 55 billion pounds of insurance liabilities could also be affected.

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    The committee reiterated its call on relevant authorities to continue to make necessary preparations to "tackle these risks."

    "Since November, in the United Kingdom, progress has been made towards mitigating risks of disruption [presented by Brexit] to the availability of financial services. Nonetheless, material risks remain, particularly in areas where actions would be needed by both the UK and EU authorities," the statement noted.

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    The bank's statement comes a week before a European Council meeting, which will focus on economic affairs.

    In December, the Bank of England said it planned to soften the impact of Brexit on the UK financial sector by allowing the banks registered in EU countries to continue selling their services in the United Kingdom without having to create expensive subsidiaries after the UK withdrawal.

    Brexit, European Union, Bank of England, United Kingdom
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