There may still be little clarity on how the U.K. with leave the EU this year, but Bank of England (BOE) Governor Mark Carney has told CNBC that his institution has been preparing for a so-called “hard Brexit” since the referendum back in 2016.
“From the day after the referendum we’ve been preparing for Brexit, no matter what form it takes, if you’re a central bank the easiest thing and the most important thing is to prepare for a hard Brexit with no transition (period). So that’s what we’ve been preparing the (financial) sector for,” Carney told CNBC’s Geoff Cutmore at the World Economic Forum in Davos on Thursday.
He said the bank’s stress tests on what could happen in the event of a “hard Brexit,” in which the U.K. leaves the EU on March 29 with no withdrawal agreement in place (and, crucially, no 21-month transition period), were part of its attempts to test the waters about what might happen.
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