EU banks will still be able do some clearing in UK, Ross says; London clearinghouses still supply key services for EU traders
European banks will still be allowed to do some clearing in London after 2025, according to the head of the European Union’s top securities regulator.
Verena Ross, chair of the European Securities and Markets Authority, hinted at a softer position than previously stated by the European Commission, which has indicated that UK clearinghouses would be cut off once the country’s post-Brexit waiver expires.
“The equivalence agreement on clearing between the European Union and the UK was extended until 2025. That does not mean that all clearing has to shift on that date,” Ross said in an interview with Bloomberg News last month.
The issue has become one of the most contentious disputes around post-Brexit financial services, drawing in the French government and the Bank of England. Ross’s comments seem to confirm widespread understanding in the market that there won’t be a hard stop in two-and-a-half years’ time for this critical part of markets infrastructure.
“It is about making sure that there is a sufficient balance of where clearing takes place and to make sure that the clearing activity that is happening outside of the EU doesn’t pose a systemic risk to the EU and its financial stability. It’s not binary,” Ross added...
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