The plans were presented in June by the European Commission and have already raised hackles in the City of London. They would hand discretionary powers to EU regulators to decide that the volumes of euro clearing in London are so important to financial stability that they must be handled from within the bloc.
But some MEPs say the measures would not go far enough and that some clearing must be relocated.
Markus Ferber, a German centre-right MEP, told the Financial Times: “It is very likely that the European Parliament will ask for an even stronger regime than the one in the commission proposal.”
Clearing houses such as Deutsche Börse’s Eurex and the London Stock Exchange-controlled LCH are crucial parts of the financial system, standing between the counterparties in a trade and managing the risk to the market if one side defaults.
Mr Ferber, a vice-chairman of the parliament committee that will debate the plans, said MEPs would consider requiring some clearing activities to move within the eurozone, given the key role that the European Central Bank would be expected to play in handling any crisis involving euro-denominated contracts.
“I am sure the debate around this point will feature prominently in the parliament’s discussions,” he said.
Another leading MEP said that the commission’s plan was a “clever approach but not a clear message” and that it would have been better to be more definite that euro clearing needed to shift out of the UK. [...]
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