EU will tighten grip on euro clearing after Brexit – 13th June 2017

The European Union plans to give itself powers to move euro clearing business away from London’s financial sector to the EU after Brexit and adopt a model closer to that operated by the United States, the bloc’s executive said on Tuesday. The financial industry has warned that forced “relocation” would split markets, bump up trading costs and diminish the status of the euro – as well as threaten thousands of jobs in the City of London. The draft EU law would, as a last resort, force euro-denominated clearing business to shift from London if the volume was deemed by Brussels to be systemically important. The bulk of clearing in euro-denominated derivatives is performed in London and involves a third party standing between two sides of a trade to ensure its smooth and safe completion.

 

Huw Jones, Reuters