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Warning over risks of moving euro clearing from London to continent after Brexit

William Turvill
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The UK voted to leave the European Union on 23 June (Source: Getty)

A senior derivatives industry official has warned over the risks of moving euro clearing from London to the continent after Brexit.

The statement comes shortly after chancellor Philip Hammond hit back at the suggestion from French President Francois Hollande that euro clearing could move to continental financial centres if the UK leaves the Single Market.

Read more: Philip Hammond hits back at Francois Hollande's clearing taunts

Eric Litvack, chairman of trade body the International Swaps and Derivatives Association (ISDA), warned today that moving clearing from London would be a huge task that would bump up costs for companies.

“We are still exploring the consequences of the euro clearing issue which are multidimensional,” Litvack said at a meeting attended by Reuters today.

“It’s very difficult to position ourselves on what is to a large degree a political debate.”

Read more: ECB, Bank of England reach agreement over clearing houses

The average daily turnover of euro-denominated interest rate swaps in the UK totalled $928bn (£715bn), or 69 per cent of the global market, as of April 2013.

Litvack added: “Moving the swaps clearing business would be a significant risk. Moving part or large part of that would be a non-trivial exercise.”

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