City grandee Michael Spencer has said EU attempts to remove euro clearing away from London would be “deeply, deeply bad” and “dangerous” for the continent.
The European Central Bank (ECB) previously attempted to prise euro-denominated clearing activity away from the City, but the move was blocked by the European Court of Justice (ECJ).
The UK’s Brexit vote last summer immediately reignited the debate, with politicians including French President Francois Hollande demanding euro clearing be moved away from London.
Spencer, the chief executive of Nex Group, today said: “At a superficial level [the argument that euro clearing should take place within the Eurozone] may sound sort of reasonable.
“But actually, once you stand back, the ramifications are really quite alarming. Because the only way they could repatriate euro clearing from the UK into the Eurozone is by effectively banning, or making it profoundly difficult for, Eurozone institutions to access to euro clearing in London.
“There is already clearing of euro derivatives in Europe… Clients could use whichever clearing [house they want], there are no restrictions, you have at the moment mutual access, mutual recognition, open access. So clients choose where they want to clear.”
Speaking at the Prosperity UK conference, he added: “The Europeans are proposing to make it impossible for European institutions to access London clearing of the euro.
“What will this mean in practice? One, it’s a return to currency protectionism and nationalism, which will be a deeply, deeply bad event…
“It’s a very dangerous situation, which I think to me summarises a lot of the issues about negation on financial services and how we have to move away from arguments of protectionism and nationalism to really what is in the interests of Europe and the world and the UK.”