November 22, 2018 09:30
The future of the Brexit raises a voltage of worrying on the financial markets, with results that are disordered, which pose a substantial risk of loss to the economy of the euro area. This could lead to a downward revision of forecasts, and possibly slow down the process of normalisation of monetary policy, thus mitigating the projected increase in interest rates, suggests Ian Russell, president and chief executive officer of thecanadian Association of securities trading (IIAC).
“The european political decision-makers, including the european central Bank (ECB), urge the regulatory authorities of the securities, to impose a regulatory regime accommodating, especially in the prospect of Brexit rigorous, in order to preserve the flow of capital and transactional cross-border and limit the potential instability in the market,” writes Mr. Russell in his most recent letter to the industry.
Agreement of the british Parliament
The approval of an agreement requires the negotiated agreement of the british Parliament and the formal ratification of each of the 27 member States of the european Union.
While most of the financial institutions based in London are preparing for a scenario of non-transaction for at least one year, and the upcoming maturity of march 2019 increased the probability of this worst-case scenario, he writes.
The regulatory provisions in case of non-agreement, in particular the measures taken when the United Kingdom will be removed from the framework of the EU, remain unclear.
The european regulators now understand better the extent of these risks and their potential market upheaval, said Mr. Russell.