Contingency plans being implemented by financial institutions will help to avoid many derivatives risks associated with a no-deal Brexit, according to a report from Fitch. However, termination risks still persist for structured finance transactions, should issues around uncleared derivatives not be mitigated.
As it stands, a no-deal Brexit would result in a lapse of EU authorisation for UK financial services, meaning the banking and capital market sectors would lose permission to enter into regulated cross-border activities with EU27 clients.
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