The European Commission has urged British banks and insurance companies to relocate to the continental Europe in order to avoid the ramifications of a ‘no-deal’ Brexit.

“Financial institutions that wish to provide banking or insurance services in the European Union should take all necessary steps to be properly authorised on withdrawal date, including by establishing presence in the EU27,” Yahoo Finance UK quoted from an official commission document.

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The document also added that the contingency measures may not completely offset the costs due to separate regulatory frameworks.

The commission has also initiated its ‘no deal’ Contingency Action Plan. The plan encompasses 14 measures across specific areas which may face major disruptions in case of ‘no-deal’. The areas include financial services as well as other key segments.

The contingency measures are devised to mitigate the Brexit impact across these sectors. UK is scheduled to leave European Union (EU) on 30 March 2019.

According to a Bank of England estimate, around 5,000 jobs will be shifted to mainland due to Brexit. However, the impact may turn worse in case of ‘no-deal’.

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In the last one year, various lenders based in London have initiated the process of shifting key operations from the UK.

HSBC will move two of its European subsidiaries to France from the UK. JPMorgan and Bank of America also announced to relocate their staff from the UK.

Last month, it was reported that French banks BNP Paribas, Credit Agricole and Societe Generale may relocate lesser number of staff than earlier anticipated.