Brussel’s to help with the UK’s current Brexit transition and avoid putting a toll on the country’s financial stability. The EU has decided to offer its banks an extra 18 months to access London’s crucial market clearing house infrastructure, FT reports.
- Financial services are a leverage point for the UK in negotiating its Brexit terms, with clearing houses like the London Stock Exchange Group’s LCH amongst the most important institutions in the global financial system.
- London is the global leader for derivatives clearing, handling the bulk of Europe’s derivatives trading worth over $735 trillion EUR.
- Currently, the Eurozone has few alternatives when it comes to derivatives clearing, but London’s pending Brexit poses some big issues.
There are still several financial and economic details regarding Brexit that still need to be ironed out by the EU, including the process of equivalence, where all financial institutions both from the EU and UK would be granted access to a common market.