text: LONDON (Reuters) – France’s banking industry association wants a new EU law that would force non-EU banks to move parts of the processing of euro derivatives from the City of London to Frankfurt, according to those familiar with the matter People.
  FILE PHOTO: 20 Euro banknotes are shown. This picture was taken on November 14, 2017. REUTERS / Benoit Tessier / Illustration
  Since the UK left the European Union entirely in December, the City of London’s financial industry has lost access to its largest market and trading in euro stocks and swaps has been relocated to the EU. Brussels is now aiming for euro clearing and started an information trip last week with a meeting with banks.
  Sources told Reuters that the French Banking Federation (FBF) doesn’t believe it would work if non-EU banks were voluntarily asked to move trillions of euros in interest rate swaps off the London Stock Exchange LSE.L LCH clearing arm to the block.
  The FBF did not have an immediate response.
  LCH deletes around 90% of all euro swaps, but only a quarter of the total of 83 trillion euros is held by EU counterparties.
  The FBF believes that forcing the relocation of only that part of the EU would undermine efforts to deepen EU capital markets, the sources said.
  Existing EU legislation only gives bloc regulators a say in EU counterparty swap positions.
  The FBF wants a new EU law to allow a “forced relocation” of euro clearing by non-EU banks, the sources added.
  Andrew Bailey, Governor of the Bank of England, which regulates the LCH, said last week he would be “very resolute” in opposing any attempt to force non-EU banks to move clearing from London to the bloc.
  The French industrial organization also wants a “roadmap” that combines such new legislation and other steps to relocate euro clearing by force, the sources said. This would be reconciled with the efforts of the Eurex clearing arm of Deutsche Börse in Frankfurt to expand its service.
  The FBF has proposed a phased approach to relocation that begins with short-term interest rate swaps, the sources said.
  FBF anticipates that it would take the markets at least a year to implement a roadmap before LCH’s “recognition” or permission to continue clearing for EU customers ends.
  LCH currently has permission from Brussels to temporarily release EU customers until June 2022, but the LSE has announced that it is hoping for long-term access.
  Reporting by Huw Jones; Adaptation by David Goodman and Jane Merriman
  Share
  Facebook
  Twitter
  Google+
  Pinterest
  WhatsApp
  Previous articleArtists have been searching for a primary residency program in New London
  Next articlewhat it means for London’s galleries, music venues, museums and golf equipment
  Alice
  https://dailylondonuk.com
  RELATED ARTICLESMORE FROM AUTHOR
  Finance
  Shell CFO Jessica Uhl resigns after the oil main’s transfer to London
  Finance
  ‘We have to break the category ceiling’: London’s traditionally higher and middle-class finance trade instructed it has to supply half its leaders from decrease...
  Finance
  Linklaters and Clifford Likelihood enhance the rating of London companions within the busy authorized employment market