BOE: Perceived likelihood of no-deal Brexit has risen

In its Financial Stability Report (FSR), the Bank of England warns of the risks of a no-deal Brexit and global financial vulnerabilities. Here are the highlights:

  • Perceived likelihood of no-deal Brexit has risen.
  • Market volatility will increase after a disorderly Brexit.
  • No-deal Brexit could cause material economic disruption.
  • UK banks have enough capital to handle a disorderly Brexit.
  • Sees risks in high debt levels, and corporate leverage.
  • Foreign investment to commercial real estate and leveraged loans has fallen 60%-80% in first quarter of 2019.
  • Mismatch in open-ended funds could pose systemic risks
  • Central bank will review how to address the issue of liquidity mismatch

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