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Tory Brexit DOOM™: Bloodbath in the City

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    Tory Brexit DOOM™: Bloodbath in the City

    ECB bids for control over Euro clearing in threat to the City

    The European Central Bank has stepped up the battle for control over London's lucrative euro-clearing market, asking for extra legal powers in its loudest call yet since the Brexit vote.

    The ECB, which only emerged from a legal battle with Britain over where clearing houses should be based two years ago, has asked to change its statute in a move that would hand it "a significantly enhanced role" over the market, one of London's flagship businesses.

    The UK won its case against the ECB to retain the bulk of the market in 2015, by arguing that it was part of the EU single market. The bank's fresh fight for more control comes in light of the EU referendum last June, with politicians and regulators on the continent arguing that EU derivatives should be cleared within the union.

    If control is diluted away from London, it will be a major blow to the capital; the market can process trades with a value of more than €850bn (£746bn) per day, while the London Stock Exchange's LCH currently handles more than 90pc of cleared interest rate swaps globally.



    The ECB said the change would give it "clear legal competence in the area of central clearing", meaning it will have extra powers to monitor any risks that might affect monetary policy or the stability of the euro.

    If accepted by the European Parliament, the revised statute would say that the ECB and national central banks "may provide facilities, and the ECB may make regulations, to ensure efficient and sound clearing and payment systems, and clearing systems for financial instruments, within the Union and with other countries.”

    The proposal follows a string of reforms published by the European Commission last week that called for Brussels to have the ability to force “systematically important” clearing houses to operate within the EU.

    Bank of England Governor Mark Carney, keen for London to retain its status as a clearing hub, warned on Monday that such a move would be in "no one's economic interest" ( ) and could damage financial stability.

    His views were not shared by ECB board member Benoît Cœuré, however, who on the same day said that the EU's clearing regime was "never designed to cope" with major clearing houses operating outside of the bloc.

    A number of senior City executives have weighed into the debate over fears London could lose its crown as a financial centre, with the London Stock Exchange's chief executive Xavier Rolet telling The Sunday Telegraph earlier this month that the land grab could result in “complete chaos.”

    Source: ECB bids for control over Euro clearing in threat to the City

    EURO clearing will go, it's not the question of if, but when.

    #2
    The proposal follows a string of reforms published by the European Commission last week that called for Brussels to have the ability to force “systematically important” clearing houses to operate within the EU.
    So protectionism then. Fight fire with fire.

    Comment


      #3
      Originally posted by DimPrawn View Post
      So protectionism then. Fight fire with fire.
      What you going to do - stop EU from clearing Sterling?

      In case you failed to notice "free market" isn't exactly in favour at the moment, that's why big trade blocks appear, insane to be outside of one of them.

      Comment


        #4
        Originally posted by DimPrawn View Post
        So protectionism then. Fight fire with fire.
        What do you call not agreeing with Freedom of Movement?

        Comment


          #5
          Originally posted by AtW View Post
          What do you call not agreeing with Freedom of Movement?
          Common sense.

          Comment


            #6
            Originally posted by DimPrawn View Post
            Common sense.
            And taking EURO clearing to run in a country that is subject to EU laws isn't?

            Comment


              #7
              Originally posted by AtW View Post
              And taking EURO clearing to run in a country that is subject to EU laws isn't?
              Fine by me, we will insist by law all Sterling clearing and related instruments are cleared in London. Common sense 'innit?

              Comment


                #8
                Originally posted by DimPrawn View Post
                Fine by me, we will insist by law all Sterling clearing and related instruments are cleared in London. Common sense 'innit?
                Sure, it would make sense, only problem is that EUR is the only real other reserve currency in the world next to USD, where as Sterling isn't.

                Comment


                  #9
                  Originally posted by DimPrawn View Post
                  So protectionism then. Fight fire with fire.
                  You are funny.

                  Comment


                    #10
                    Originally posted by DimPrawn View Post
                    Fine by me, we will insist by law all Sterling clearing and related instruments are cleared in London. Common sense 'innit?
                    "Just you, and your schoolboy politics, and your idiotically conceited faith in your own importance."

                    Sir Nigel Irvine...

                    Comment

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