A German central banker today called for financial services clearing to stay in London, in a bid to build bridges between the UK and the EU post-Brexit.
Andreas Dombret, executive board member of the Bundesbank, said the movement of companies to Frankfurt prompted by the Brexit vote would bring the German financial centre closer to the capital markets, making it "necessary to counter the negative stimulus of Brexit with a positive stimulus towards a deeper, high-performance capital market".
"This could promote the development of Europe’s economies. That would require rigorous advancement of the European capital market union project. Yet the door needs to be left open for a close and deep partnership with the United Kingdom," he added.
Dombret said there will be a need to build bridges between the UK and the EU post-Brexit, and "one opportunity for such a bridge could be... the topic of central counterparty (CCP)clearing".
Calls to move euro clearing from London to the Eurozone intensified after the EU referendum last year, and were ramped up again recently when 20 major banks gave their backing to a new rival clearing service based on the continent.
Today, Dombret advocated for intensive cooperation between UK and EU supervisory authorities, "which would also have to include far-reaching powers of information and intervention for EU supervisors vis-à-vis UK CCPs". If this were the case, Dombret said, there would be no need to relocate clearing business from London.
"At all events, London will remain one of the world’s leading financial centres. That is why creativity and a truly global outlook will be necessary in order to place future cooperation between the EU27 and the United Kingdom on a solid legal footing," Dombret said.
"For one thing is also clear – the world’s fast-growing regions are not going to stand idly by while Europe indulges in navel gazing."