Since the EU referendum in 2016, the FPC and other authorities have identified risks of disruption to the financial system that could arise from Brexit and worked to ensure they are addressed. Stress tests and supervisory actions have ensured major UK banks have levels of capital and liquidity to withstand even a severe economic shock that could be associated with a disorderly Brexit. The Government is taking forward the legislation necessary to avoid disruption to financial services provided by EU firms to UK households and businesses. The Bank, other UK authorities and financial companies have engaged in extensive contingency planning.
The FPC has reviewed a disorderly Brexit scenario, with no deal and no transition period, that leads to a severe economic shock. Based on a comparison of this scenario with the stress test, the FPC judges that the UK banking system is strong enough to continue to serve UK households and businesses even in the event of a disorderly Brexit.
The full report is available at https://www.bankofengland.co.uk/financial-stability-report/2018/november-2018