[...] while governments have in general welcomed the idea of post-Brexit oversight of the City — and the chance to shift lucrative clearing from London to the EU — the plans could stall over national governments’ reluctance to hand Esma more powers over their own financial services industries.
Diplomats told the FT that a number of capitals are resisting the extra Esma powers to oversee their clearing houses, arguing that it is an unnecessary whittling down of the role of national regulators.
Berlin has gone as far as to propose that the draft law should be formally split in two, allowing the parts dealing with non-EU clearing houses to be agreed and put into effect while other aspects of the proposals are dealt with later.
But the commission has insisted that the Esma powers over EU and non-EU clearing houses must be agreed hand in hand, otherwise European authorities could effectively end up with more oversight of what is going on in the City than they would have over EU financial centres.
Some governments, including Denmark, Finland and the Netherlands, also warn that splitting the legislation would set a dangerous precedent of governments cherry-picking the parts of the laws they want. [...]
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