Bank of England warns EU: Punish UK and YOU will pay €22billion a year
BANK of England boss Mark Carney has warned the European Union any attempts to remove clearing houses from the UK could cost Europeans €22billion each year.
By KATIE MANSFIELD
Express.co.uk
Tue, Jun 20, 2017
Currently the UK houses some of the world’s largest CCPs (central counterparty clearing houses).
The EU has released proposals which could force operators to leave London as a result of Brexit, putting the capital’s multibillion pound industry at risk.
But Bank of England governor Mr Carney has waded into the row warning the EU efforts to move clearing houses could cost Europeans a fortune.
He said: “Fragmentation of such global markets by jurisdiction or currency would reduce the benefits of central clearing.”
The bank boss then added: “fragmentation is in no-one’s economic interest.”
Mr Carney, in a speech at Mansion House, said: “Industry estimates suggest that a single basis point increase in the cost resulting from splitting clearing of interest rate swaps could cost EU firms €22bn per year across all of their business.
“Those costs would ultimately be passed on to European households and businesses.
“Moreover if the large stock of existing trades of EU firms – tens of trillions of euros in size- was trapped at a CCP which was no longer recognised by the European Commission, those EU firms would face capital charges as much as ten times higher than today unless and until they could move them.”
The Rest…HERE
