This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-39524662

The article has changed 4 times. There is an RSS feed of changes available.

Version 1 Version 2
Brexit talks: Mark Carney says financial regulation at 'fork in the road' Brexit: Bank urges City to 'plan for all eventualities'
(about 3 hours later)
Bank of England governor Mark Carney has warned the global financial system is at a "fork in the road" going into the Brexit talks. The Bank of England has written to the UK's biggest financial firms, urging them to plan for "all eventualities" from the UK leaving the European Union.
In a major speech on the impact of Brexit on the City of London, Mr Carney said the negotiations would influence how banks are regulated. Bank governor Mark Carney said the "vast majority" of City firms already had contingency plans in place.
The UK and European Union were "ideally positioned" to strike a trade deal on financial regulation, he said. However, he said that some financial firms still needed to prepare in case of a "more extreme" outcome.
But he warned against a "bonfire of regulation" if a deal was not reached. In a speech, Mr Carney urged the UK and EU to recognise each other's bank rules after Brexit.
Prime Minister Theresa May triggered Article 50 last week, starting the formal talks on the UK's withdrawal from the EU. Prime Minister Theresa May triggered Article 50 last week, starting two years of formal talks on the UK's withdrawal from the EU.
The Bank has written to the heads of banks and other financial services firms to ensure they have contingency plans dealing with different outcomes from Brexit. Goldman Sachs, HSBC and UBS are among the banks that have said they will move some jobs out of London as a result of Brexit.
'Low road' 'Contingency plans'
The UK's central bank wrote to all banks, insurers and other financial firms with branches in the UK which operate in the EU.
It has given the companies three months - to 14 July - to explain what contingency plans they have in place.
In the letter, it says some companies may not be ready for the "most adverse potential outcomes". That would happen if a trade deal and interim arrangements were not in place when the UK leaves.
Mr Carney said: "Prudent planning means that you have to also plan for a shorter time horizon and a more extreme outcome.
"That in no way shape or form is saying that that's what our expectation is, and certainly we'll be absolutely clear that is not in the best interest of the EU 27 or the United Kingdom or the global system as a whole."
Asked if firms should move now, he said: "No, that's not the most prudent. It's prudent to be in a position to continue operating after the UK leaves."
The central bank has indicated it is largely happy with the big foreign banks' planning, but is more worried about smaller foreign banks with UK branches who do business in the EU.
'Fork in the road'
Many US and European banks are based in London, offering their services throughout the EU under a process known as "passporting".
In a major speech on the impact of Brexit on the City, Mr Carney urged the UK and EU to strike a deal on UK-based banks offering services into the EU and vice versa.
Mr Carney said the two sides were "ideally positioned" to reach an agreement, because they currently have exactly the same bank regulations.
He also underlined the importance of the City of London to the EU, saying it was "Europe's investment banker" and a "global public good".
The Bank governor said the City of London and other financial centres were at a "fork in the road" going into the Brexit talks.
"The outcome of the Brexit negotiations could prove highly influential in determining which path the global financial system takes," Mr Carney said in a speech at Thomson Reuters in Canary Wharf."The outcome of the Brexit negotiations could prove highly influential in determining which path the global financial system takes," Mr Carney said in a speech at Thomson Reuters in Canary Wharf.
He warned against countries taking the "low road" where they turned inwards, cut back on regulations and did not work with other regulators. He warned against countries taking the "low road" where they turned inwards, cut back on regulations and did not work with other regulators.
This would lead to fewer jobs, lower growth and higher domestic risks, he said.This would lead to fewer jobs, lower growth and higher domestic risks, he said.
Major US and European banks are based in London, offering their services throughout the EU under a process known as "passporting". In the Brexit talks, the "high road is both readily attainable and highly desirable", he added.
'Contingency plans' But Mr Carney emphasised that he was not calling for a specific deal on financial services.
Mr Carney underlined the importance of the City of London to the EU, saying it was "Europe's investment banker" and a "global public good". He said the industry was just "one sliver - albeit an important sliver" of the wider Brexit negotiations.
He said the two sides were "ideally positioned" to strike a deal on UK-based banks offering services into the EU and vice versa.
"We start from a position where the high road is both readily attainable and highly desirable for all involved.
"The UK and the rest of the EU have exactly the same rules governing our systems," Mr Carney said.
But he also recognised that an agreement on financial services was "one sliver - albeit an important sliver" of the Brexit negotiations.
"Given our responsibilities to promote financial stability, the Bank - like its counterparts on the continent - must plan, purely as a precaution, for all eventualities," he says.
As a result, it has sent letters to UK firms who offer services in the EU to ensure they have "contingency plans for the full range of possible scenarios".
The vast majority of firms in the City have already put in place such back-up plans, he added.
Goldman Sachs, HSBC and UBS are among the banks that have said they will move some jobs to other European cities as a result of Brexit.