Draghi, Carney to Study Brexit Finance Risks, But Don't Expect a Fix

The European Central Bank and the Bank of England have been drafted in to study the threats that Brexit poses to financial services. Just don’t expect this “technical working group” to save the day.

Brexit’s potential to disrupt trillions of dollars of derivatives contracts and tens of millions of insurance policies has emerged as a point of contention between the U.K. and European Union, with British policy makers calling for a coordinated legislative solution to prevent market turmoil. The EU says the industry should take the lead.

With the politicians in a standoff, the U.K. sees the working group, formed at the request of the European Commission and the U.K. Treasury, as a way to generate solutions that will allow banks and insurers to continue servicing contracts after Britain’s withdrawal from the EU, according to people with knowledge of the matter.

The Europeans are more restrained, saying the group will concentrate on analysis of the risks and leave the fixes to the politicians, the people said, asking not to be identified as the discussions are private.

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