Bank of England prepares to protect City firms from hard Brexit

Governor Mark Carney begins work on transitional arrangements to maintain London’s stature in global finance. The Bank of England is pushing ahead with plans for transitional arrangements following Brexit negotiations in a bid to protect financial institutions from a cliff edge deal that could undermine their stability.

Governor Mark Carney has met senior figures in the City to stress the need for a smooth path out of the European Union that maintains the City’s stature and strong links with the continent.

The meetings follow the governor’s submissions to the all-party Treasury select committee that outlined his view that banks and other financial institutions would need to be given time to put new rules in place after a deal had been struck with Brussels.

The CBI and the British Bankers Association have lobbied No 10 and No 11 to impress on the prime minister and chancellor that transition arrangements will be needed or firms could face a barrage of new tariffs and trading relationships.

Banks are concerned that “passporting” agreements that allow transactions to flow across border uninterrupted could be scrapped or modified as part of the Brexit negotiations, denying them easy access to customers inside the single market.

Brexit supporters cast Carney as a member of an elite that will campaign behind the scenes by placing administrative roadblocks in the way of a quick exit.

But Threadneedle Street has emphasised that it respects the referendum vote and merely wants to protect a vital sector of the economy from unnecessary harm following article 50 talks.

Carney was facing criticismfor spending almost £100,000 of taxpayers’ money on its annual summer party, just weeks after the Brexit vote.

Carney and about 2,500 Bank staff, policymakers and their families attended its annual summer sports day, at a cost of £99,035 to the public purse.

The Bank insisted it “carefully budgeted” for the Governors’ Day get-together on 10 July at its sports ground in Roehampton, south west London, according to a Freedom of Information request by the Press Association.

The TaxPayers’ Alliance branded the party a “huge slap in the face to all those who have struggled under the Bank of England’s policies”.

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