September 20, 2018 / 2:26 PM / 2 months ago

EXCLUSIVE-Hammond urged European peers to help Britain cope with possible hard Brexit - EU source

BRUSSELS, Sept 20 (Reuters) - Britain’s finance minister urged the European Commission to help devise European contingency plans for the financial sector in case of no deal on Brexit, in a sign of growing concerns about a disorderly departure from the European Union.

Philip Hammond made his plea at a meeting of EU finance ministers in Vienna at the beginning of this month, according to an EU official with direct knowledge of the matter.

He called on the EU Commission to “engage” on preparing plans that could reduce or avoid disruption to the financial sector in case of a so-called hard Brexit.

Hammond is most concerned that financial contracts could be rendered invalid by a hard Brexit.

Although he insisted that Britain was still committed to reaching a Brexit deal, he acknowledged the risks of there being no agreement before March.

No one was immediately available for comment at Britain’s finance ministry.

The EU commissioner on financial services, Valdis Dombrovskis, said at that meeting that work was underway to address “possible” problems, according to the EU official. But he played down Hammond’s concerns about the continuity of financial contracts, saying he expected limited problems.

The argument mirrored an earlier clash between the EU Commission and the Bank of England over contingency planning.

Brussels is saying it is up to supervisors and firms to adapt to Brexit.

The Bank of England has called this approach “impractical” and said 82 billion pounds ($109 billion) of insurance liabilities involving 48 million policyholders could be disrupted across Britain and the European Economic Area.

Derivatives worth a notional 26 trillion pounds are also likely to be affected by Brexit. ($1 = 0.7539 pounds) (Reporting by Francesco Guarascio; Editing by Hugh Lawson)

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