The Bank of England's Prudential Regulation Authority has sounded the alarm | Leon Nea;/Getty Images
UK banks warned against suddenly shuttering EU customer accounts
Disruption could occur in event of a no-deal Brexit.
Updated 10/9/20, 3:33 PM CET
U.K. banks need to give EU customers “sufficient notice” before closing bank accounts or dropping services due to Brexit, regulators warned Friday.
The Bank of England’s Prudential Regulation Authority and the Financial Conduct Authority told chief operating officers to take “final steps” to prevent disruption should Britain crash out of the bloc without a deal at the end of the year.
“Financial stability is not the same as market stability and some market volatility and disruption to financial services, particularly to EU-based clients, could arise,” the letter warned.
The two regulators said services to EU retail customers “may be impaired” after Brexit, depending on the national regime in place, and clients should be treated fairly if services will be cut or reduced.
“In many cases, it would be a poor outcome for the customer for you to suddenly stop servicing them,” the two authorities cautioned.
The letter follows reports that U.K. banks are shutting accounts for expats ahead of the end of the transition period.
The regulators also warned banks and other financial firms under their watch to make sure derivatives and data contracts are up to date — cautioning clients may try and shift derivatives trades to the EU within a short timeframe.