Mark Carney, Governor of the Bank of England has warned that a severe Brexit will seriously impact the City’s derivatives market and Banks will therefore find it harder to find products that manage balance sheet risks. Mr. Carney said that European Companies would be particularly hard hit, finding themselves cut off from these services and thus causing “unforeseeable moves in markets”. As reported by the Financial Times, “a hard Brexit could also drain market liquidity, raise doubts over the validity of cross-border contracts, and generate alarm by obscuring financial exposures”. A House of Lords committee has concluded that the UK-EU financial system is so closely linked that there are currently “serious difficulties” in predicting the outcome of dramatic legal changes. Meanwhile, Mario Draghi, President of the European Central Bank, has said that he has does not have the same concerns as the Bank of England, believing that the costs of Brexit would largely be contained within the UK, and the financial services industry, being a highly mobile sector, would adapt accordingly to the new circumstances.