Shambolic Brexit holds systemic risks - DTCC

Shambolic Brexit holds systemic risks - DTCC

The chaotic preparations for Britain's exit from the European Union has emerged as a top systemic risk concern for capital markets players surveyed by the Depository Trust and Clearing Corporation (DTCC)

Close to half of respondents (49%) cited concerns around the significant uncertainties attributed to Brexit as one of the top five risks for industry in the coming year, as the March 2019 Brexit date quickly approaches. The Brexit ranking represents an 11% increase over last year’s survey results, making it the most significant year-over-year change in the findings.

As with previous surveys, cyber risk remained the number one threat to the financial industry, with more than a third of respondents (37%) citing it as the most significant risk and 69% ranking it within the top five. Fintech risk, along with the potential impact of economic slowdowns across all regions, also increased in importance with respondents.

Michael Leibrock, DTCC’s chief systemic risk officer, says: “It is critical that firms continue to remain vigilant to anticipate and prepare for not only these emerging risks, but the potential cascading effects that may arise from an increasingly interconnected financial system.”

On the Brexit front, the DTCC is already making its own preparations, joining the rash of firms opening new offices in Europe to avoid the fall out from Britain's departure from the EU.

The New York post-trade infrastructure has begun a recruitment offensive in Dublin, Ireland following the opening of a new base in the Irish capital for its Global Trade Repository service.
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