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Benoît Coeuré, a member of the ECB’s executive board, said it would be “challenging” for Britain to devise post-Brexit regulations that would provide sufficient confidence for UK-based clearinghouses to continue to process trades in the euro.
Mr Coeuré added that the current set-up, in which London is the world’s biggest centre for clearing euro derivatives, was only possible because of solid co-operation with the Bank of England, and because of a shared foundation of “European law . . . implemented under the authority of the European Court of Justice”.
Mr Coeuré’s stance echoes a letter from Mario Draghi, the ECB’s president, to a member of the European Parliament. Mr Draghi’s letter notes that EU financial regulations give the ECB “broadly appropriate guarantees for the supervision and oversight” of UK clearinghouses. This includes a right for the ECB to take part in EU-wide “colleges” of central banks and other supervisors that monitor such platforms, it says.
The European Commission will in the coming weeks propose changes to EU legislation on derivatives trading to take account of practical experience gained since the rules were adopted in 2012. Last year, it unveiled draft rules aimed at containing the damage should a clearinghouse fail.
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