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21 February 2018

Financial Times: Deutsche Börse sets sights on quarter of euro clearing post-Brexit

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The new chief executive of Deutsche Börse has said he wants the Frankfurt exchange to win at least a quarter of the market for clearing euro interest rate swaps from London by 2019 and called on politicians for more support in its efforts.

“It cannot be true that we are on the eve of Brexit but we don’t move euro clearing to continental Europe,” Theodor Weimer told journalists in Frankfurt on Wednesday, adding that “I want to bring it to Frankfurt”. [...]

Mr Weimer suggested his company could take 25 per cent of the market for clearing euro denominated interest rate swaps, dominated by London’s LCH, which processes up to €1tn of notional deals each day. Some politicians want direct oversight of instruments that affect stability of European capital markets but authorities have so far stepped back from demanding the business be relocated to the eurozone.

According to Mr Weimer, not only the EU exchanges but also market participants would benefit from moving euro clearing to Frankfurt. “It’s a win-win situation, as market participants can diversify their risks. It’s beneficial for them to not have all eggs in one basket in London,” he said. This could boost the exchange’s net revenue by €70m a year, he added. [...]

Full article on Financial Times (subscription required)

© Financial Times

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