Sam Woods, chief executive of the Prudential Regulation Authority, has warned of a ‘cliff edge’ for financial systems.
The warnings from the financial regulator have to be taken seriously. He has no political axe to grind. And the Bank of England has to be on guard. The 10th anniversary of the beginnings of the banking crisis is a reminder of what happens when warnings of financial instability are not taken seriously enough.
His point is that not merely is the City exposed to the risk of losing business with the loss of passporting rights as we leave the Single Market; it is also exposed to financial instability if a major economic crash forces individuals and companies to default on their loans.
The government should listen to the Bank of England’s wise advice and back off from its dangerous ‘hard Brexit’ strategy.