March 9, 2016 / 8:03 PM / a year ago

ECB questions banks on 'Brexit' preparations - Handelsblatt newspaper

BERLIN, March 9 (Reuters) - Supervisors of the European Central Bank are questioning banks over their preparations for a possible British exit from the European Union and the ensuing reaction in foreign exchange markets, German newspaper Handelsblatt reported on Wednesday.

Britain will hold an 'in-out' referendum on its continued EU membership on June 23, with opinion polls showing Britons evenly divided on the issue.

The ECB supervisors want to check the readiness of banks for "extreme shifts" in forex trading and for possible losses from foreign currency loans, Handelsblatt said, citing unnamed sources.

"The bank's supervisors will make more extensive enquiries in the coming weeks in order to make greater headway on this issue," one unnamed insider told the paper.

It also quoted Andreas Dombret of Germany's Bundesbank as saying "a potential Brexit is very dangerous" for financial stability.

The ECB, which holds a regular policy meeting on Thursday, was not immediately available to comment on the Handelslbatt report. (Reporting by Tina Bellon; Editing by Gareth Jones)

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