Brussels proposes to extend EU banks’ clearinghouses to the UK

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In a victory for the City of London, Brussels has proposed extending EU banks’ access to UK manufacturing facilities for a further three years.

The European Union Commission announced on Wednesday that it is proposing a new so-called “equality decision” that will allow banks and other financial institutions in the bloc to use critical market facilities in London until June 2028.

EU politicians tried to capture the profit Euro-certified cleaning industry In the year Since the Brexit vote in 2016, however, they have accepted the financial system is still based on the UK, which dominates the clearing of global products.

Cleaning up Houses reduce market risk by standing between two parties in a business.

London regularly handles deals worth around $3.5tn per day. It is a global hub for trading interest rate derivatives and Brent crude oil through London Stock Exchange Group LCH and intercontinental currency clearing contracts.

European derivatives traders have lobbied hard to extend the city’s license, which expires in three years on June 30. Member states have five days to object to the Commission’s proposal to extend it until June 2028, but officials said such an objection was highly unlikely.

The Commission says UK-based clearing houses are essential to its plan to build a single market in savings and investment.

“Two (clearing houses in the UK) have been identified by the UK’s European Securities and Markets Authority as being of strategic importance to EU financial stability,” Financial Services spokesman Olof Gill said of LCH and ICE.

“Therefore, in the short term, it is necessary to extend the parity decision to avoid risks to financial stability and to provide certainty and transparency to EU financial market participants,” he said.

But he added that Brussels is committed to building a competitive industry. Last year, the European Union approved an amended European Market Infrastructure Regulation that would require banks to maintain “active accounts” on EU clearinghouses for certain products if users breach minimum thresholds.

The Regulation contains measures to improve the attractiveness and competitiveness of EU markets. This will help reduce the EU’s reliance on UK refineries in the medium term,” Gill said.

Pascal Cairnes, a member of the European Services Forum, which represents services companies trading internationally, welcomed the move.

“In the medium term, it provides a clear outlook for operators in the EU financial market.

“This gives a good political signal for a real ‘reset’ of EU-UK relations,” he said.

The two sides have started talks to improve their trade relations. UK Chancellor Rachel Reeves met her EU counterparts in December to call on them to drop barriers to city companies. She said that they will increase the growth of the European Union by transferring international investment to the Union.

Clearing is the only part of financial services that has been given parity since Brexit.