Home Finance Britain says EU will struggle to shift euro clearing from London
Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Britain says EU will struggle to shift euro clearing from London

by jcp
7 views

By Huw Jones

LONDON (Reuters) – Britain’s financial services minister said on Tuesday that the European Union would find it hard to replace London for clearing trillions of euros in derivatives, and that the limited shift in activity so far was not gathering pace.

After Britain left the bloc, Brussels said it wants to build up euro clearing capacity inside the EU to end heavy reliance on the London Stock Exchange’s LCH unit, which clears most euro interest rate swaps.

Brussels is allowing EU banks to use London for clearing until June 2025, and in the meantime will introduce incentives for banks to shift more activity to Frankfurt, and potential penalities for those who don’t.

“It’s quite challenging to build up that infrastructure, but that is a matter for them,” UK financial services minister John Glen told the House of Lords European Affairs Committee.

Small amounts of clearing have moved from London but not enough to concern Britain, Glen said.

“I don’t think it’s part of a trend,” he added.

Although Brexit largely cut off Britain’s financial sector from the bloc, Glen said the sector has grown and is resilient, with around 7,000 jobs leaving London for the EU, not the haemorrhage initially predicted.

With the exception of clearing, the EU has not granted access for other financial activities from Britain, unlike for the United States and Singapore.

“I am not waiting for that decision,” Glen said, adding his focus was on keeping London a competitive and well-regulated place for clearing.

Britain and the EU will develop their own regulatory regimes in parallel, particularly in new areas such as fintech, green finance and crypto, Glen added.

There was, however, concern among non-EU banks about EU proposals that could force them to set up a branch when providing wholesale market services to clients in the bloc, Glen said.

“We will be expecting the EU to clarify where they are going. They seem to be moving in a positive direction and I welcome that,” Glen said.

 

(Reporting by Huw Jones; editing by Barbara Lewis)

You may also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More