Krautscheid: 100 days before Brexit - crisis mode becoming the norm
“100 days before the United Kingdom leaves the EU, a hard Brexit is more likely than ever", comments Andreas Krautscheid, the Association of German Banks’ chief executive, on the ongoing preparations in the banking sector. The clock is ticking: on Wednesday, 19 December, it is only 100 days until the United Kingdom leaves the European Union. "This means: if there is still no parliamentary majority for the withdrawal agreement in the third week of January, businesses and banks will have to switch to emergency mode. There will be no two-year transition period and no transitional arrangements.”
Mr Krautscheid adds: “This emergency mode has always been our plan B, one that banks have had in mind and prepared from the very first day. We now have to work on the assumption that it is going to become reality. All business processes and all customers in the German industry must be ready to cope in 100 days from now if the legal framework in force today in the London financial marketplace no longer applies. We need to ensure together that our closely intertwined economies suffer as little harm as possible and that supply chains continue to work across the Channel.
I expressly welcome it that the German government and the European Commission are in the process of building a safety net together with all market participants through a number of legislative measures and equivalence decisions, e.g. for clearing in London. The transfer of activities, client accounts and balance-sheet assets worth hundreds of billions of euros from London to the continent has been proceeding at a considerable pace for many weeks now. Even if the Frankfurt financial marketplace is profiting from this and over 30 foreign banks have applied for new banking licences for Frankfurt, the dominant feeling on our part in the coming weeks will be one of concern.”