Bank of England Deputy Governor Sam Woods advocated the need for a transition period after Brexit, saying it would give British and EU-based companies more time to make necessary changes, Reuters reported.
Woods, who is also the CEO of the BoE's Prudential Regulation Authority, said that "some form of implementation period is desirable" to make orderly changes.
Woods previously asked banks to provide details on how they would deal with a hard "Brexit" scenario, under which the U.K. would leave the EU with no transition deal. Responses received by the PRA revealed "significant issues for many firms," adding to risks already identified by the BoE, including those relating to the continued servicing and performance of existing contracts and restriction on data transfers, Reuters reported, citing Woods' letter to Nicky Morgan, new chair of the U.K. Treasury Select Committee.
The letter was made public Aug. 9. Woods also flagged the possibility of a dramatic rise in the number of insurance policies moving from one country to another, a matter that involves courts.
The U.K. has not presented a firm request for a transition period, Reuters reported. U.K. Prime Minister Theresa May's spokesman recently said that free movement of people from the EU to the U.K. will cease when Britain's membership of the bloc ends in March 2019.