Deutsche Bank AG and UniCredit SpA moved some of their swaps trades from London to Frankfurt in May as banks used a lull in the ongoing Brexit drama to prepare for the worst.
About 10 banks took part in a switching run where lenders closed existing swaps positions in the U.K. and opened equivalent ones in Germany, according to people familiar with the matter, who asked not to be named because the trades are private. Some of the 10, including JPMorgan Chase & Co. and Commerzbank AG, acted as market makers, treating the exercise as an opportunity to generate revenue by trading with the banks.
Continental European banks would be unable to keep their swaps -- a widely used type of derivative -- in London from April next year if the U.K. leaves the European Union without a deal. That could force the banks to move trillions of dollars of derivatives from LCH Ltd., a unit of London Stock Exchange Group Plc, to Frankfurt’s Eurex Clearing, part of Deutsche Boerse AG. [...]
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