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Bank chiefs meet finance ministers amid no-deal Brexit fears

Bank bosses will meet leading British government ministers this week to discuss steps to ensure banking lending does not dry up in the event of a no-deal Brexit.

Prime Minister Boris Johnson has said the U.K. will leave the European Union on Oct. 31 with or without an exit deal on the terms of its departure and its future relationship with the bloc.

The Bank of England has stress-tested U.K. banks to assess their preparedness for a no deal and deemed them ready, but there are fears that smaller firms in particular might struggle to access lending to pay bills in a disruptive Brexit. The government is spending £100 million on a Brexit no-deal awareness campaign.

Under the terms of the deal set up by the previous government led by Theresa May, the U.K. would have had a nearly two-year transition period before finally quitting the bloc. However, in the event that no deal is agreed, there will be no transition period, and Britain will be outside the EU on Nov. 1.

On Sept. 2, the Department for Business, Energy and Industrial Strategy said there will be a meeting between ministers and leading bankers but declined to comment further.

Ministers expected to attend the meeting, scheduled for Sept. 5, include the business secretary, Andrea Leadsom, and Michael Gove, the minister in charge of no-deal preparations, according to the Financial Times.

The government is reportedly concerned to ensure that banks continue to lend after Brexit. Banks, in turn, are likely to push the government to extend the Enterprise Finance Guarantee that offers government guarantees to loans to businesses and that would not normally meet lenders' requirements.

UK Finance, which represents the financial services industry, will also attend Thursday. It declined to comment directly on the meeting but said the U.K. banking industry was ready to support viable businesses, whatever the outcome of Brexit.

"Over 80% of finance applications from SMEs in the UK are successful, showing that firms should be confident in approaching their bank to discuss any financing needs. We would urge any small businesses to get in touch early on to improve their chances of success," said Stephen Pegge, managing director commercial finance at UK Finance.

The Chancellor of the Exchequer Sajid Javid and City Minister John Glen were also due to meet Barclays PLC CEO Jes Staley, David Schwimmer, CEO of the London Stock Exchange Group PLC, and Howard Davies, chairman of the Royal Bank of Scotland Group PLC, among others. The meeting, set for Sept. 2, will reportedly cover potential opportunities and risks arising from Brexit.