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Caitlin McErlane

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On 9 July 2020, the European Commission published a Communication to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions entitled “Getting ready for changes: Communication on readiness at the end of the transition period between the European Union and the United Kingdom”. The Communication aims to highlight the main areas of inevitable change and to facilitate readiness and preparations by stakeholders, especially in light of the Commission’s views that “[n]egotiations so far have shown little progress” and that “broad and far-reaching changes … will arise under any scenario”. The Communication raises some key points for UK financial services firms, which we highlight in our post.

Financial institutions face two categories of emergencies arising out of the coronavirus disease that could impair their functioning. The first is directly financial: a sudden drop in the value of financial assets, or loss of liquidity, whether domestically or elsewhere in the world that could lead to a national or even global financial crisis. The second is operational: the failure of the support structures that underpin the financial system.

Over recent years, the financial services industry has come to be increasingly defined by, and reliant upon, new technologies and systems. Alongside the opportunities afforded by the increased use of technology, regulators are increasingly aware of the growing threat of disruption caused by technology outages and cyber-attacks.