The Bank of England said an agreement is needed as part of theBrexit process to protect the “long-term validity” of 20 trillionpounds ($27.1 trillion) of existing derivative contracts.
The BOE's Financial Policy Committee said on Monday that afterthe U.K.'s withdrawal from the European Union, it will be “complexand difficult” for financial firms themselves to tackle the risksto continued servicing of contracts between counterparties in theU.K. and the remaining 27 EU countries.
“Impairment to the servicing of these contracts could disruptmarket functioning and make it more expensive for firms andhouseholds to insure against risks,” the BOE said in astatement.
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