The BoE also noted the sheer scale of the problem, should the status of these derivatives not be resolved in any Brexit agreement, with tens of thousands of parties' tied-up derivatives contracts at stake, constituting a sizable chunk of the overall sector – "close to a quarter of all UK and EU client uncleared derivative contracts". The UK is a major centre for what are known as "over-the-counter" (OTC) derivatives, which are contracts individually agreed between two parties, accounting for nearly half of global activity in interest rate derivatives, and more than a third of global activity in foreign exchange derivatives contracts.
The UK 's derivatives market must be protected from the risk of financial disruption after the Bank of England , EU (BoE) has said, with the fate of £20tn ($27tn) of contracts at stake. Central bankers are "exploring actions" to help financial companies offset derivatives risks after the UK pulls out of the Bank of England , the BoE said. It has urged special arrangements be made in any Brexit agreement to protect the 27 of contracts between UK investors and counterparties in the remaining thousands EU countries.