BOE believes British banks can cope with no-deal Brexit
British banks hold enough capital to cope with a simultaneous disorderly no-deal Brexit and global trade war, the Bank of England said on Thursday as part of its half-yearly assessment of financial risks.
In an assessment that raised little in the way of new concerns, the BoE confirmed it would intensify its focus on risks such as illiquid investment funds, liquidity shocks, crypto-currencies and environmental dangers.
Businesses have said a no-deal exit would cause widespread economic disruption, and the BoE noted a sharp fall in foreign investors buying British commercial property and some company loans during early 2019.
Britain runs a large current account deficit with the rest of the world, and BoE Governor Mark Carney has previously warned that the country relied on “the kindness of strangers”, which could evaporate during market tensions.
“Financial stability is not the same as market stability. Significant volatility and asset price changes are to be expected in a disorderly Brexit,” the BoE said on Thursday.