across 28 countries. 7 given that, it would be an odd approach to follow outside the eu. and few non - eu countries have. indeed, even as a member of the eu, the uk has taken the second, very different, approach. by tasking us with promoting a financial system that serves households and businesses in bad times as well as good, it overlaid eu rules with an outcome to be pursued. see speech by sam woods ( may 2019 ) : ‘ stylish regulation ‘. all speeches are available online at www. bankofengland. co. uk / news / speeches and that outcome is what the uk parliament holds us to account for delivering, even as times change. that has given us the freedom and responsibility to move regulation with the times ; to be agile. it ’ s a responsibility we take seriously. brexit nowhere has that been more obvious than brexit. on june 24th 2016, we started contingency planning for a ‘ no - deal ’ brexit. with our focus on making sure finance can serve the wider economy, our work has had two elements. first, checking that, whatever economic disruption arises as we leave the eu, major banks have the capacity to keep lending through it. we know from our stress tests that banks can withstand an economic scenario for the uk that is worse than the financial crisis. that stress test scenario encompasses even a brexit scenario based on the very worst case – ‘ disorderly ’ – assumptions, including : severe disruption at the border, acute economic uncertainty and financial market instability, and sharp increases in inflation requiring interest rates to rise. on that basis, we ’ ve been able to judge the core of the uk banking system to be able to continue to serve through brexit, whatever form brexit takes. the second element of our work has been to ensure that households and businesses using services from eu financial companies can continue to draw on those services after brexit. 70 branches of eea banks operate in the uk and provide services to both eu and uk end users. uk households and businesses hold 16 million insurance policies with eu insurers. 8 uk investors invest in funds based in the eu. and clearing houses based in the uk sit at the centre of eu and global derivatives markets, helping the financial system to manage and distribute risks. that ’ s why the bank, the government and the fca have put in place measures – temporary permissions regimes - to ensure that uk households

and businesses can continue to use these services and these contracts after brexit. see ‘ resilience of the uk financial system to brexit ’ in the july 2019 financial stability report. all speeches are available online at www. bankofengland. co. uk / news / speeches and it ’ s why we ’ ve worked with european authorities to ensure uk - based clearing houses continue to be allowed to serve their eu clients after brexit, avoiding unnecessary disruption to financial markets. all this work will not, on its own, guarantee either market stability or economic stability as we leave the eu. but it does mean that companies planning for brexit don ’ t need to add ‘ prepare for financial instability ’ to their to - do lists, freeing up their capacity to promote the smoothest possible exit from the eu. climate risks we ’ re also looking beyond brexit, to prepare the financial system for the challenges of climate change. the physical risks of climate change are already affecting financial companies. since the 1980s, the number of registered weather - related insurance loss events – events resulting in property, infrastructure and / or structural damage in the affected regions – has tripled. 9 the intergovernmental panel on climate change has warned that global temperatures are likely to rise further. 10 our financial system needs to be able to manage the risks that come with that. for example, around 10 % of the value of mortgage lending in england is on properties in flood risk zones. 11 some uk banks also have large direct exposures to regions that are particularly vulnerable to the physical risks from climate change such as south and south - east asia. at the same time, the system will need to manage the risks associated with the economic transition that will be associated with reducing carbon emissions. over 190 countries have committed to limit the global temperature rise to well below 2°c. the uk government is targeting a 100 % reduction in net emissions by 2050. 12 the transition to a carbon neutral economy will see material structural changes in the uk and world economies. some assets may become stranded : if global warming is to be limited to well below 2°c, close to 80 % of remaining coal reserves and half of remaining oil reserves would become un - burnable. 13 many other sectors, which ultimately rely on carbon emissions, will see their profitability and businesses challenged. we cannot allow the financial system to be an obstacle to making the transition because it can ’ t deal with it. see chart 1 in