The city of London will lose the right to carry out clearing settlements in the Euro after Brexit

The city of London will lose the right to carry out clearing settlements in the Euro after Brexit

Moscow. June 29. British financial institutions will not be able to carry out the clearing of trade transactions in Euro after British exit from the EU, warned French President Francois Hollande during the Brussels EU summit.

According to him, the holding in the UK of clearing transactions in euros, which is a key stage in the trading of financial instruments, including equities and derivatives, will be “unacceptable.”

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“The company’s city of London, which, thanks to UK membership in the EU would be able to carry out clearing transactions for the Eurozone will no longer be able to do that – said Hollande. It may serve as an example for those who are waiting for the end of Europe. It can serve as a lesson.”

The European Central Bank (ECB) had previously tried to achieve the transfer of the activities of British companies engaged in clearing operations in Euro, in the Eurozone, considering it unfair that he or she may be waiting for allocation of emergency aid clearing houses, was outside the jurisdiction of the ECB, writes the Financial Times.

Britain, however, challenged the requirements of the ECB in court and won the argument, saying that the rule governing the issue of choosing the site clearing is discriminatory and jeopardizes the country’s role in the single market.

In March last year, the General court of the European Union has recognized the illegal demands of the ECB, and Minister George Osborne called it “a major victory”.

Prime Minister David Cameron has outlined the issue of preventing similar attacks from the ECB in the future as one of the priorities of the renegotiation of Britain’s membership in the European Union in case of refusal of the country from Brexit.

Clearing houses, such as Eurex Clearing and LCH.Clearnet, play a key role in the confirmation of transactions concluded in financial markets, and minimize losses if the trader is not able to fulfill their obligations.

London is a world leader in clearing certain types of tools, the cost of which is denominated in euros.