The Bank of England says it needs to take action to avoid a post - European fina
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The Bank of England said on Friday that the interruption risk of consumer insurance and derivatives contracts is "substantial" unless the United Kingdom and the European Union take action before they return to Europe.
The British central bank's Financial Policy Committee (FPC) issued a statement on its March 12th meeting on March 12th, saying that Britain has made progress in reducing the risk of financial services interruption after the euro's return to Europe in March.
"In spite of this, the substantial risks are still in, especially in areas where the UK and EU authorities need to take action," FPC said.
If no action is taken, the insurers in Britain and the EU may not be able to make a claim for the policy or to charge a premium.
It is especially worrying that the indefinite derivative contracts with an estimated size of 26 trillion. These contracts need a temporary licensing mechanism to provide services.
"The EU authorities have not announced the intention to agree to such permits," FPC said.
Reuters has been trying to contact the European Commission's executive committee to comment on the matter.
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