London Stock Exchange boss warns moving euro clearing away from UK could cost banks $77bn

William Turvill
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Xavier Rolet is due to stand down from the London Stock Exchange when it merges with Deutsche Boerse (Source: Getty)

The chief executive of the London Stock Exchange Group has warned that moving euro-denominated clearing away from the UK could cost banks $77bn (£63bn) in additional collateral.

Xavier Rolet said that moving clearing from London to other financial centres would impose a “prohibitive cost on European banks”.

Read more: Warning over moving euro clearing from London to continent after Brexit

French president Francois Hollande suggested that euro-denominated clearing could move to continental financial centres after the UK voted for Brexit in June.

But Rolet, speaking at a New City Agenda event in the House of Commons today, warned that New York – rather than Paris, Frankfurt or any other European city – would likely be the main beneficiary.

Rolet has also previously warned, in an interview with Bloomberg, that 100,000 UK jobs would be put at risk if clearing leaves the UK, which is currently home to around 75 per cent of trading in euro-denominated interest-rate swaps, according to the Bank for International Settlements.

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

The London Stock Exchange Group is the majority owner of LCH, which dominates the clearing of interest-rate swaps.

The $77bn figure is based on research by think tank Clarus, which has estimated that the move away from the UK would double collateral costs for banks.

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