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Regulators, governments and the European Commission are working with financial market players to minimize the risk from Brexit at the end of March, according to Scholz. He hinted that being ill-prepared could have fatal consequences.
“We want to ensure that even in the case of a hard Brexit, there is no danger for the stability of individual firms and the financial system as a whole,” Scholz told bankers and other finance industry professionals at a reception held by the operator of the Frankfurt stock exchange on Thursday.
The decision on how Brexit will proceed is up to the U.K. parliament, according to Scholz’s prepared remarks. The other 27 members of the EU agree that there won’t be a renegotiation of the deal that’s on the table, he said, adding that he wants to maintain a “close” relationship with the U.K.
The German parliament will probably approve a law this month to avoid turmoil in a hard Brexit by giving watchdog BaFin emergency powers to ensure cross-border financial contracts and uncleared derivatives remain valid, Scholz said.
Scholz’s host, Deutsche Boerse AG, has sought to capitalize on one consequence of Brexit -- the desire to move the clearing of euro-denominated swaps to the remaining member states. The minister said he welcomes the fact that investors have started to move business to the company’s platform.
The EU is close to updating laws governing Deutsche Boerse’s competitors outside the EU, according to Scholz. The minister said he favors giving the European Central Bank as well as the EU’s top markets cop wide-reaching oversight of the industry, including the power to demand relocation of clearing of euro-denominated derivatives to the EU when it is necessary to maintain financial stability.