As soon as the Brexit referendum result was in, some in Brussels spied an opportunity to dent the City of London. 

But after nearly eight years of wrangling, EU policymakers reached a deal this month which will draw some business into the bloc, but far less than expected. 

What’s more, the agreement was made possible because the French sided with its country's banks, who wanted to continue using U.K. clearinghouses, denying Germany — and Deutsche Börse in particular — a win.

The saga has dominated finance policymaking circles in the years since Brexit and strikes at the heart of the question of whether the City of London can retain its global prowess outside the EU. 

“The picture is far from rosy, but it's much better than what we thought or what we could have expected, given what was coming our way,” an individual working in public policy in the City of London said, who declined to comment on the record given the sensitivity of the topic.

The arrangement agreed between Brussels policymakers could feasibly have seen significant amounts of trades taken from U.K. clearinghouses and forced into EU ones. Just last September, ECB staff unofficially lobbied governments to require EU banks to move 30 to 40 percent of their trades from London.

The final deal is expected to result in a far smaller percentage moving over, so it's being chalked up as a big win: for EU banks, which don’t want to quit U.K. clearinghouses, and for London, where, despite the rhetoric, cutting off the City post-Brexit has proven impossible.

Love for London

Clearinghouses are generally viewed as the “plumbing” of the financial system — they act as a middleman in transactions, providing a kind of insurance so if one party fails, there isn’t a ripple effect throughout the economy as was seen in the 2008 financial crisis. U.K. clearinghouses — and one in particular, LCH — have always been the most popular choice for banks across the globe...

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