A survey we held among selected insurers, less significant institutions (LSIs), pension funds and asset managers in the second half of 2018 revealed that the majority of Dutch financial institutions have a Brexit plan in place. In terms of depth and focus their contingency plans vary with the specific risks they face and their exposure to customers and counterparties based in the United Kingdom. At the time, they had not yet activated the measures in their plans on a large scale.
Planning for Brexit
The survey results prompted us to take individual follow-up action to verify the progress institutions made in implementing the measures set out in their Brexit plans. As it turned out, most have made a start with implementation. The ECB requested the significant institutions (SIs) supervised under the SSM to submit their Brexit plans and contingency measures for assessment. We were actively involved, and we are also in direct contact with SIs about their preparations.
In addition, several temporary measures, mainly designed to prevent problems in derivatives markets in the event of a no-deal Brexit were recently announced by the European Commission and the Dutch Ministry of Finance.
Preparing for no deal remains a necessity
Taken together, these measures greatly reduce risks to financial institutions and financial stability under a no-deal Brexit scenario. However, this does not mean that no risks remain. For example, LSIs could still face Brexit risks in the area of outsourcing or the exchange of personal data. Of course, risks may also emerge that are as yet unforeseen. It is therefore imperative that financial institutions keep preparing for a no-deal scenario and implement their plans as long as the political uncertainty continues. We will continue to alert institutions to this issue, and will take additional individual action where needed.