Ignazio Visco has cautioned all EU countries they will not be able to avoid “major repercussions” if the Withdrawal Agreement is not ratified before Brexit day, March 29.In a keynote speech at the 25th annual Assiom Forex Congress, a meeting of 450 of Italy’s financial institutions with over 1,400 members, Mr Visco advised EU leaders they should not underestimate a no-deal Brexit simply because the impact on international trade would hit Britain. The economist said the Italian government has already prepared “contingency measures” but urged European banks to take it upon themselves to play an “active role” in preparing for the possibility that a deal may not be reached between Brussels and the UK.
Mr Visco, who took over from Mario Draghi when his compatriot became President of the European Central Bank, said: “A no-deal Brexit could have serious consequences even if the direct impact on international trade, while strong for the United Kingdom, may prove limited for Italy and for the EU as a whole.
“Any financial market malfunctions could have major repercussions for all the countries involved and this issue is currently being looked at very closely.
“Together with the supervisory authorities the Italian government has prepared a number of contingency measures.
The 69-year-old explained those emergency plans include an adjustment phase to allow UK and Italian business operating in each other’s countries to adapt to the post-Brexit market.
Mr Visco, who also serves as an alternate member of the International Monetary Fund’s board of governors and was previously at the World Bank in a similar role, said the contingency measures “provide for an adequate transition period to guarantee the integrity and business continuity of the markets and of intermediaries – both British intermediaries operating in Italy and Italian intermediaries established in the UK – and to safeguard investors and customers”.
He added most of the no-deal Brexit legwork has been done by Brussels but individual country’s financial institutions still had to act in order to ensure as smooth transition as possible.
The Banca d’Italia chief said: “Important decisions have already been taken by the European Commission, which is currently working to ensure the continuity of financial transactions between European intermediaries and British central counterparts.
“The Single Resolution Board (SRB) has also announced that it will be flexible with European banks in the event that securities issued in the UK no longer count towards the minimum requirement for own funds and eligible liabilities (MREL).
“As national and European authorities have recalled on many occasions, banks must nevertheless play an active role in the preparations for a no-deal scenario.”
Mr Visco’s comments came after an Italian MEP said Remain would win a second referendum and called for Theresa May to put her deal to the British people.
Lara Comi, who sits in the European Parliament on behalf of the centre-right Forza Italia party, said: “Perhaps a referendum would be good to let citizens express themselves.
“‘Do you want this agreement or do you want to stay within the EU?’
“In my opinion, the second option would win.”
The 35-year-old repeated the EU’s rhetoric that the Withdrawal Agreement is not up for renegotiation.
Speaking on the sidelines of a mini-plenary session at the European Parliament in Brussels, she said: “Europe can not change the agreements.
“We have had a very constructive dialogue, an agreement that was also approved by May. Now they have to decide internally.”
(Additional reporting by Maria Ortega)
Source : EXPRESS