The Prudential Regulation Authority has not carried out any contingency planning over the long-term effects of Brexit.
Following a Freedom of Information request to the regulator, the PRA says it had conducted “significant contingency planning” for any market volatility that could have happened before, during, or in the immediate aftermath of the UK’s vote to leave the EU.
But it admits it has not drawn up plans for the longer term impact of Brexit.
The PRA’s initial planning included requesting information from firms on how they were set up to deal with risks over the referendum period, , allowing the Bank of England to assess what risks would apply to particular businesses.
The Bank of England’s directors also met on 25 May, one month ahead of the referendum vote, and a new team was set up to coordinate Brexit work within the PRA.
The PRA said: “Over the referendum period, the PRA stepped up its regular contact with firms and established a small team to coordinate that work. That team maintained a 24-hour presence on the day of the vote. That team monitored market movements and any new developments relevant to the safety and soundness of PRA regulated firms.”
“Using Bank [of England]/PRA Stress Testing work the PRA has analysed the impact of any economic shock to the large UK banks’ capital positions and they remain resilient”
The PRA says it has not yet carried out an analysis of how the UK’s financial sector would cope under different models outside of the EU though.
It said: “Given the significant range of outcomes for the UK’s ongoing relationship with the EU, the PRA has not carried out any contingency planning on these longer term outcomes.”
The PRA declined to comment on whether more analysis has since been carried out.