Euro banks cut UK asset exposure
EBA says firms need to prepare for possible cliff-edge, in which EU rules cease to apply in UK and new agreement isn't in place when Britain exits in March 2019.
(Bloomberg) European banks pared their exposure to Britain in the aftermath of its vote to quit the European Union, slashing their UK assets by $425 billion (€356 billion) in the span of a year.
The decline was driven by a 35% drop in derivatives exposures, showing European banks are preparing for the risk that the UK fails to reach an agreement on its future relationship with the bloc before its departure. Banks in the 27 other EU countries had €1.59 trillion in total assets tied to the UK at the end of June, about €356 billion less than a year earlier, a report from the European Banking Authority (EBA) showed. Britons voted to leave on June 23, 2016.
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