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17 October 2018

Financial Times: US threatens to bar EU banks from exchanges


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One of the US’s top regulators has threatened to stop European banks from using US futures markets if the EU refuses to water down post-Brexit plans to oversee clearing houses.


Christopher Giancarlo, head of the Commodity Futures Trading Commission, said on Wednesday that EU plans — ostensibly in response to the UK’s move to leave the EU — were “completely irresponsible” and could be met with a stern reaction from Washington. “These are blunt and strong tools,” Mr Giancarlo said, acknowledging that it could have a serious impact on global markets. “None of these options represent a course of action that I wish to pursue.”

Mr Giancarlo’s fierce warning comes as UK authorities try to remove tensions with the EU around the issue of clearing as the UK’s departure from the bloc nears. If a resolution could not be found, he warned the CFTC could unilaterally take its own action — including barring EU banks from using critical US infrastructure such as the Chicago Mercantile Exchange. The CME is widely used by banks around the world to hedge their exposures to dollar swaps and US Treasuries. It could also bar US institutions from EU entities such as Deutsche Börse’s Eurex, which trades futures pegged to the prices of German government bonds.

Full article on Financial Times (subscription required)



© Financial Times


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