Bank of England says Brexit talks are moving in the right direction – but “material risks remain”

The Bank of England today said “progress” in mitigating the impact of Brexit on the City has been made over the last few months.

However, its Financial Policy Committee (FPC) warned “material risks remain” and called for officials in Westminster and Brussels to their game.

Last November the Bank of England said Brexit risks did not warrant the need for additional capital buffers for banks. As part of today’s stress test scenarios for banks, developments over the last few months have not changed this assessment.

“Brexit could also disrupt the financial system directly,” the Bank of England report said.

Since November, in the United Kingdom, progress has been made towards mitigating risks of disruption to the availability of financial services. Nonetheless, material risks remain, particularly in areas where actions would be needed by both the UK and EU authorities.

Read more: Bank of England says stress test scenario will be same as last year’s

“Crypto-assets”

Meanwhile, central bankers tackled the thorny topic of cryptocurrencies – or as it defined them “crypto-assets”.

Despite governor Mark Carney urging for a crackdown on digital currencies earlier this month, the FPC concluded they “do not currently pose a material risk to UK financial stability”.

It added: “The committee recognises the potential benefits of the technologies underlying crypto-assets and of their potential to create a more distributed and diverse payments system. It welcomes the work of the bank and other authorities to explore ways of achieving these benefits in a robust and efficient manner.”

Read more: Bank of England stress tests: This is how the lenders reacted