EU Wants City of London’s €927 Billion A Day Euro Business

Thousands of jobs could go in latest BREXIT challenge. 

A four-page European Commission “communication” released Thursday has thrown into doubt whether the U.K. will be able to retain its almost €1 trillion euro-clearing business, threatening London’s status as the de facto financial hub of the EU.

It appears to be the first shot fired in the financial services battle following the U.K.’s Brexit vote, with the EU declaring war on euro clearing.

Right now, London handles €927 billion worth of euro-denominated transactions each day, and as much as 75 percent of euro-denominated interest-rate derivatives are cleared at clearing houses in the U.K. Clearing involves an entity standing in the middle of two parties to a transaction, with the aim of managing the risk that arises if one party cannot make required payments.

Although the U.K. is outside the eurozone, it is subject to the EU’s landmark derivatives legislation, the European Market Infrastructure Regulation (EMIR), and to EU supervision.

But after Brexit, that would all change, and the EU is not content to sit back and watch its currency being traded in a non-member country and without the ability to intervene in case of financial instability.