Banks hold ‘daily conversations’ over Brexit chaos plans


The Bank of England is having daily talks with banks in a bid to protect the financial system in the event the UK votes to leave the EU.

Deputy governor Andrew Bailey, soon to be FCA chief executive, told a regulation conference all lenders were preparing contingency plans, according to The Times.

Bailey said: “All the banks are looking at this very actively. We have not seen any evidence of sterling funding issues at all. Generally the challenge for banks these days is to get a return on funding rather than finding funding.”

Yesterday, ratings agency Fitch warned the pound could drop in value by a third on a leave vote. In addition, house prices could slump by a quarter, putting intense pressure on lenders’ balance sheets, it said.

Bailey also defended the Bank of England’s decision to comment publicly about Brexit, saying “we would be failing in our job if we didn’t”.

He added the City had “no god-given right” to remain a global banking centre and that its standing would be under threat if the UK exited the EU.

Last month governor Mark Carney said a Brexit vote was “the most significant near-term domestic risks to financial stability”.

The Bank has already announced plans for three repo auctions to be held around the 23 June vote in a bid to boost cash reserves.