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Report: Banks prepare for potential market turmoil 10 days ahead of Brexit

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Report: Banks prepare for potential market turmoil 10 days ahead of Brexit

Financial markets are preparing for potential turmoil 10 days before the U.K. leaves the EU amid the increasing possibility of a no-deal Brexit.

Banking sources told Reuters that companies have already put in place contingency plans to deal with a potential rout in stocks, bonds and the pound Oct. 21, instead of immediately after the Oct. 31 departure date.

The U.K.'s Benn Act would require Prime Minister Boris Johnson to seek a Brexit extension by Oct. 19 if no deal is reached by Oct. 17. Johnson has insisted he will not request an extension.

If no divorce agreement is reached or extension sought, markets would have to deal with either the resignation of the government or a clash with Parliament and courts over the legislation, both of which will likely spook investors, a senior banker told the newswire.

Meanwhile, markets are showing no sign of panic so far, with most expecting an election to take place before Brexit, the report noted.