News  |  World  |  Europe  

EU gives post-Brexit reprieve to London clearing houses

21 September 2020   |   1:23 pm  

An EU Flag flown by an anti-Brexit protester is seen with Union Flags set on a flag pole in Parliament sq1uare in front of the Houses of Parliament in London on January 30, 2020. – Britain will leave the European Union formally at 2300GMT on January 31, 2020. (Photo by Tolga AKMEN / AFP)


The EU on Monday adopted a crucial emergency measure to safeguard the stability of financial markets after the Brexit transition period ends on December 31.

The decision came as negotiations on future relations between EU and UK have descended into acrimony, with the increasing likelihood of a chaotic, “no-deal” scenario.

The plan is to preserve the stability of the market in derivatives, a complex but vital financial instrument that allows traders to insure themselves against sudden interest or currency exchange rate swings.

The EU derivatives market is almost exclusively centred on London and was notionally valued in 2018 at 660 trillion euros ($750 trillion) — nearly 300 times the size of Britain’s entire economy.

In the EU’s plan, institutions where these transactions are finalised would have a licence to keep working with EU traders for another 18 months after December 31.

It will allow European firms until mid-2022 to handle the key service, currently executed by the London Stock Exchange and other clearing houses.

“Clearing houses … play a systemic role in our financial system,” Valdis Dombrovskis, an EU Commission executive vice president, said in a statement.

“We are adopting this decision to protect our financial stability, which is one of our key priorities,” he added.

The next formal round of negotiations on the future relations agreement will take place in Brussels next week.

Already at an impasse, the talks were further undermined by Britain’s wish to go back in part on its divorce agreement, signed in January, to the fury of the Europeans.

In this article:

You may also like

2 hours ago
The Federal Airports Authority of Nigeria (FAAN) has closed the KFC outlet at the Murtala Muhammed International Airport (MMIA) in Lagos. FAAN’s spokesperson, Obiageli Orah, disclosed this in a statement on Thursday. The closure follows a complaint by a customer in a wheelchair, alleging discriminatory treatment he received at the airport by officials of the…
1 hour ago
The Federal Competition and Consumer Protection Commission (FCCPC) said it discovered a deceptive claim about the weight of a bag of rice at the Garki Modern Market in Abuja. Ag. Executive Vice Chairman/Chief Executive Officer of FCCPC, Dr. Adamu Abdullahi, disclosed this in a statement on Friday after the Commission conducted a targeted enforcement operation…
1 hour ago
The National Bureau of Statistics (NBS) says the All-commodity group import index on average increased by 0.79 per cent in Q4 2023.