The ECB sent letters to major eurozone banks with largeexposures to the U.K. asking about their contingency plans if the U.K. votes inJune to exit the EU, Reuters reported May 10, citing "several peoplefamiliar with the matter."
The lenders are being asked to provide the regulator withinsight into how they would deal with potential market shocks and how theirbusiness models will be affected. A source at a German lender reportedly said thecentral bank wanted to know about its exposure to the pound sterling as well asto fixed income, equities and loans portfolios in the U.K., among other areas.The source added that because the lender's was not expecting significantupheaval in the event of Britain leaving the EU, it sees no need to take actionapart from providing assurance that its trading desks would be able to copewith high levels of volatility on June 24, the day after the vote.
ING GroepNV CEO Ralph Hamers reportedly said during a news conference on May10 that a Brexit would not lead the Dutch bank to review its London-basedfinancial markets and structured financial businesses. However, Hamers addedthat if other large banks were to move their trade businesses out of London,the group could move as well.
A separate Reuters report from the same day revealed thatresearch from London-based regulatory think tank JWG estimated that Britishfinancial firms could face £17 billion of costs through 2026 following a Brexitvote due to regulatory issues.