LONDON, Jan 18, Reuters - The European Union will allow banks in the bloc to use clearing houses in London for another three years from June, its financial services chief said on Tuesday.
Mairead McGuinness said last November https://www.reuters.com. Such permission, known as equivalence, would be extended for an unspecified period from June 2022, when it is due to expire, to give more time to shift clearing from London to the continent.
We are consulting member states on this draft equivalence decision, which will take the form of an implementing act. A spokesman for McGuinness said that they were looking into an extension of the equivalence decision of three years - until June 2025.
With little success, Brussels has tried to persuade banks in the EU to relocate clearing from operators like London Stock Exchange Group, whose LCH arm clears about 90% of euro-denominated interest rate swaps to Deutsche Boerse in Frankfurt.
The EU looked at incentives to switch clearing after banks warned that moving to clearing would backfire, prompting the relocation of clearing mandatory.
In coming weeks, McGuinness will launch a public consultation on measures to make the bloc an attractive clearing hub, and on the supervisory arrangement for EU central counterparties CCPs. The public consultation will help in the medium term reduce our reliance on UK CCPs, McGuinness said.