'They don't know what they're talking about!' City chief warns Brussels bosses HANDS OFF
BRUSSELS chiefs' attempts to take euro clearing out of London would be “deeply, deeply bad” and “dangerous” for the continent, according to a senior City figure.
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Nex Group boss executive Michael Spencer described the bid as a regrettable sign of the adversarial nature of Brexit and blamed scheming French politicians for being behind the plans.
Euro clearing is where a clearing house stands in the middle of two counter-parties to a euro-denominated derivatives trade, as buyer to every seller and seller to every buyer.
The European Central Bank (ECB) previously attempted to move it away from the London but the move was blocked by the European Court of Justice (ECJ).
Senior City figures have criticised plans to move euro clearing out of London
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The Europeans genuinely don’t know what they’re talking about. It is quite laughable
Brexit immediately reignited the debate, with politicians including the then French president Francois Hollande demanding euro clearing be moved away from London.
The European Commission is currently considering whether to attempt to force euro clearing firms to move from London a new location within the eurozone.
But Mr Spencer told City AM: “I personally find the dialogue about the forced attempt to move euro swap clearing back to Europe as a pretty extraordinary and retrograde and really nationalistic movement.
“Sadly, my opinion is that what the Europeans are discussing doing is a really sad and, if I might say, ill-informed because a piece of economic nationalism that is deeply against efficient and free markets.
The City of London is the global centre of euro clearing
“And the notion that for some reason the euro is a currency that the clearing house for euro derivatives has to be in Europe is ludicrous.
“I mean, we clear dollars successfully in London. We clear yen – nobody’s phoned London from Tokyo saying we must insist that your yen clearing in derivatives is moved back to Tokyo or Australia or New Zealand or Hong Kong or Singapore or Hungary or any other currency in the world.”
Mr Spencer, who suggested French politicians are behind the idea, said companies currently choose to clear in London, rather than any other city.
French politicians are thought to be pushing for the move
He said: “The Europeans genuinely don’t know what they’re talking about. It is quite laughable.
“But it’s a sign regrettably of the adversarial nature at this stage of the Brexit debate and the aspirations, if I might say of some French politicians who bang the drum very aggressively about this.”
Mr Spencer’s Nex Group, formerly known as Icap, is a UK-based business focused on electronic markets and post trade business.