London Stock Exchange chief David Schwimmer says the City is “too important” for a post-Brexit raid on its financial sector to be a success.
The executive says Brussels’ plot to raid London of its lucrative clearing houses will not deny European banks access to the Square Mile. Schwimmer said “we’re well past the point” where there is a risk of LCH, the London Stock Exchange Group’s clearing house, being denied access to the European lenders.
That is despite efforts from the EU to force banks to shift clearing business away from the City of London, reports the Telegraph. These clearing houses act as middlemen in trades between banks.
They have become a vital part of the financial sector since the 2008 crisis. chwimmer told Bloomberg TV: “We’re in 2023 and this has been an ongoing discussion for years. I think we’re well past the point where there is a risk of LCH being shut down in terms of its access to Europe.
“I think the various stakeholders in the EU recognise how important LCH is to their institutions, banks and asset owners.
“There may be some requirement for entities in the EU to have an active account in an EU clearing house, but I don’t think it’s a likelihood that you’ll see a shutting down of access to LCH.”
The European Commission last year revealed controversial plans to punish banks for failing to move clearing activity out of London. The European commissioner for financial services, Mairead McGuinness, has criticised the bloc’s “excessive dependence” on London’s €660 trillion (£568 trillion) clearing market.
McGuinness, the Irish commissioner, said the EU’s reliance on the City of London was akin to its dependence on Russian oil and gas.
A temporary post-Brexit agreement currently allows the EU’s banks and money managers to clear trades in London until June 2025. On Thursday the LSEG reported a mixed set of results for the first six months of 2023.
It’s acquisition of Refinitiv in 2021 moved the group from predominantly making revenue from share trades and listings into a international data and information giant.
However, the Telegraph claims shares fell as much as 6pc on Thursday before paring some losses to close 1.5pc lower, valuing the company at £45.6bn.
