LONDON, Oct 18 (Reuters) - A report on risks to the stability of derivatives markets posed by Brexit could lead to regulatory intervention, European Commission officials said on Thursday, dismissing warnings they could tumble off a cliff edge if Britain leaves the bloc with no deal.
EU financial services chief Valdis Dombrovskis said initial findings into potential stability risks to markets around Brexit Day next March will be published in the coming days.
The study is being led by the Bank of England and the European Central Bank with input from the European Commission and Britain’s finance ministry.
Banks have called for regulators to take preventive action to avoid disruption to insurance and derivatives contracts if there is a no-deal Brexit.
Britain is taking legal steps to ensure contract continuity, but the EU has so far declined to mirror these moves.
Dombrovskis told a Politico event that the clearing of derivatives is one area of concern that has emerged, but the private sector could take action to mitigate risks, such as shifting contracts from London to the EU before March.
Britain hopes that a transition deal can be included in a divorce settlement, which would mean transactions between it and the EU could continue without disruption until the end of 2020.
Dombrovskis said he would be following up on the central banks’ initial findings to see if any regulatory action was needed by the EU.
“There is no cliff edge,” Olivier Guersent, Dombrovskis’ top civil servant added. (Reporting by Huw Jones; Editing by Hugh Lawson)