Companies should keep preparing for Brexit and in doing so consider the wider impact it could have on their financing and hedging, says Joe Cassidy.
Conditional agreement on a Brexit transition period gives global companies vital breathing space. However we believe companies should not only press on with Brexit preparations, should also assess more broadly what a potentially fragmented financial system might imply for the way they finance and hedge operations.
Too few are currently addressing this hidden consequence of Brexit in their plans. Non-financial corporates should not assume their financial counterparties will come to them with a solution… or that they have Brexit all worked out. Clarity may only emerge at the last moment and come too late for companies to rearrange access to finance, switch bank branches or obtain local authorisations.
To reduce risk and keep finance flowing, we are advising corporate clients to:
1. Look again at you banking and financial relationships:
2. Make sure your regulated financial businesses can continue to operate cross border.
… and establish four certainties in your planning: