© Reuters. FILE PHOTO: A euro logo sculpture stands in Frankfurt, Germany, October 26, 2014. REUTERS/Ralph Orlowski
By Huw Jones
LONDON (Reuters) – The transfer of euro clearing from London to the European Union must be “market-led” rather than forced, with the change already well underway, the head of Eurex Clearing said. said on Tuesday.
After Brexit, the European Union said it would not allow EU market participants to delete euro derivatives in London after June 2025, citing the need to end excessive reliance on the market. That’s like how the bloc is cutting its reliance on Russian energy.
Brussels will propose a law later this year with “motivation” to move euro clearing away from London Stock Exchange governs payments in euros, for Eurex in Frankfurt, using a combination of mandatory and voluntary measures.
Erik Mueller, CEO of Eurex Clearing, said market participants want to compete, and Eurex now accounts for 27 trillion euros ($28.83 trillion) in euro swaps, 20 percent of the market. part.
“The trend is clear,” Mueller told the IDX derivatives industry conference, adding that the “pie” will grow to increase volume further.
“We will continue to push for a market-leading solution that will be the best outcome for everyone.”
Julien Jardelot, Head of Europe at London Stock Exchange Group (LON:), said EU companies pay more in non-euro currencies than the euro and need to continue to access London to avoid spending increases costs and risks.
Julia Kolbe, head of market policy at Deutsche Bank (ETR:), said requiring EU pension funds to clear their derivatives in the bloc and widen the range of products to be cleared would boost liquidity, a key EU goal.
Kolbe added that it is necessary to consider allowing EU liquidity providers access to clearing pools outside the bloc after June 2025.
Donna Rix, Europe general counsel for the Citadel Group, said the benefits of managing all the clearing and currency risks in one place cannot be underestimated because of the separation of clearing between Two operators will increase the cost.
“We strongly support market-based voluntary measures,” said Bruce Savage, Europe head of derivatives industry body FIA.
(1 dollar = 0.9367 euros)
