The Bank of England is anticipating 130 financial firms from across Europe applying for licences to continue operating in the UK after Brexit.

The figure was outlined in an interview on Tuesday with Reuters by the Bank's Deputy Governor, Sam Woods, and underlines the disruption to the financial sector that leaving the EU single market will have on the City of London.

The Bank has received around 400 responses to the request from Mr Woods, who is also head of the Prudential Regulation Authority, for financial firms to spell out to the regulator what they intend to do upon Brexit.

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Many UK based firms are expected to apply for licences from the European authorities to continue serving their EU customers when Britain loses its single market "passport".

But the comments of Mr Woods emphasise there will be substantial applications in the other direction, posing a challenge for domestic regulators.

"We are having to push the 'inbounds' to move on with their thinking," he said.

"I think we are likely to see at least 130 applications to be authorised here in the UK. It's [a] significant stretch, but I think we can do that."

Mr Woods also said that branches of EU banks in the UK might have to convert to becoming subsidiaries, meaning they would have to build up capital buffers locally.

He said the decision on conversions would be made by the regulator in two or three months, assuming there was no breakthrough in the Brexit talks which made it clear a comprehensive transition deal would be agreed in time.

 

"Broadly, come Christmas time, we will need to move into a different mode of receiving applications," Mr Woods said.

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