Bank of England governor Mark Carney asks for banks’ Brexit plans

Banks have been ordered to reveal contingency plans for the “full range of possible scenarios” after Brexit to help ward off threats to financial stability, Bank of England Governor Mark Carney said on Friday

Prudential Regulation Authority chief executive Sam Woods is writing to all firms trading with the EU — such as US banks trading in Europe under passporting arrangements — asking them to set out their plans, the Canadian said.

Carney’s comments come a week after Theresa May’s triggering of Article 50 set the clock running on two years of talks to find a deal likely to have a major impact on the Square Mile.

“Whatever is agreed, there are risks to financial stability both in the transition to the new relationship and in the new steady state. These risks include disruption of services, a further weakening of investment banking profitability and the potential for greater complexity in firms’ legal structures,” he said.

Carney also stressed that the UK was at a “fork in the road” and urged it to shun protectionism and “take the high road” to more jobs, stronger growth and better risk management.

“It is all too easy to give in to protectionism, but the road less taken is often the most rewarding,” he said.

UK industry wobbled in February as manufacturers struggled, official figures showed today.

Output slid 0.7%, and the trade deficit also hit a five-month high. Capital Economics economist Ruth Gregory said: “Today’s deluge of UK economic data was fairly disappointing and adds to the evidence that the economy has lost some momentum during the first quarter.