On 11 December 2018, the House of Commons Treasury Select Committee published a report "The UK’s economic relationship with the EU: The Government’s and Bank of England’s Withdrawal Agreement analyses".

In the report, the Select Committee considers the analyses of HM Treasury, the Bank and the FCA on the economic effects of the withdrawal agreement and political declaration for the future EU-UK relationship, as well as the consequences of leaving the EU without a withdrawal agreement. Chapter 6 of the report considers the impact on financial services following the evidence the Select Committee received from the FCA's Chief Executive, Andrew Bailey and the PRA's Chief Executive Officer, Sam Woods.

A related Select Committee press release gives a summary of the report, together with comments from the Chair of the Select Committee, Nicky Morgan.

Among the key conclusions of the report are that:

  • the "White Paper" scenario in the Government analysis represents the most optimistic and generous reading of the political declaration, insofar as it is consistent with it at all. It certainly does not represent the central or most likely outcome under the political declaration, and therefore cannot be used to inform Parliament’s meaningful vote on the withdrawal agreement;
  • Parliament may prefer to draw from the range of the scenarios in the Government analysis, additionally informed by external analysis and comment, in order to assess the economic impact of the withdrawal agreement;
  • the Select Committee is disappointed that the Government did not produce short-term analysis of its deal;
  • the Government should have modelled the backstop;
  • the Bank of England is confident that the financial services sector can withstand a no-deal Brexit.