The EBA calls for more action by financial institutions in their Brexit-related communication to customers

17 December 2018

As a follow up to its June 2018 Opinion on financial institutions' preparedness for the UK withdrawal from the EU, the European Banking Authority (EBA) today reminds affected financial institutions to maintain their efforts in effective contingency planning and to increase their efforts in communicating to customers. The EBA urges such institutions to take its Opinion into careful consideration and to swiftly proceed with advising customers on the specific implications stemming from the UK withdrawal from the EU.

In its follow-up monitoring of the June 2018 Opinion, the EBA has observed continued progress in contingency planning but little evidence of financial institutions communicating effectively to their customers on how they may be affected by the UK withdrawal and on any relevant actions undertaken by such institutions as part of their contingency planning that may affect those customers' contractual or statutory rights.

The EBA is therefore calling on all financial institutions affected by the UK withdrawal from the EU, directly or indirectly, to take the EBA June Opinion into careful consideration, and on that basis to engage with their customers and provide adequate information on the risks and mitigating measures being taken, and do so as soon as possible providing the customers at least with the information specified in the EBA June 2018 Opinion.

The EBA also notes that, should the customers that have concerns about whether they may be impacted by the UK withdrawal from the EU and that have not been contacted by their financial service provides by the end of 2018, they might wish to contact their financial institutions directly.


The EBA's June 2018 Opinion focused on the risks posed by the seeming lack of adequate contingency preparations by financial institutions with a view to ensure that they (1) establish whether they have direct or indirect exposures to the UK, and (2) consider the risks concerned, and associated mitigating action and contingency plans.

In its Opinion, the EBA also asked competent authorities to engage with financial institutions to ensure that they have carefully assessed their obligations to (existing and prospective) customers, and taken any necessary actions to ensure the continuity of services in the light of their continuing contractual commitments. The EBA requested competent authorities to engage with financial institutions to ensure that they provide clear information to customers whose contracts or services may be affected, as soon as that information becomes available to them, and in any event no later than the end of 2018.

Since the publication of the Opinion, the EBA has continued, together with supervisory and resolution authorities, to monitor institutions' progress in their contingency planning and customer communication. The EBA observes that there has been some progress by financial institutions in a number of areas. For example, more institutions are implementing contingency plans and the contingency plans themselves have advanced in substance too. In particular, more institutions are getting necessary licences and relocating their businesses and claim to have made progress in diversifying access to funding, introducing contractual bail-in clauses into newly issued MREL instruments and introducing contractual clauses to facilitate data transfers.

The EBA and supervisory and resolution authorities will continue to monitor contingency planning. While the main focus remains on financial stability and continuity of wholesale markets, notably derivatives, the EBA is also concerned over the preparations of smaller and less sophisticated institutions, in particular, payment institutions and e-money institutions, and their ex ante communication to customers who may be affected by the UK withdrawal from the EU in the absence of the ratified Withdrawal Agreement.

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