The European Union (EU) is reportedly facing increased pressure to rethink its current clearing strategy in London.
Banks and lobby groups, including the International Swaps and Derivatives Association, have stepped up efforts to overturn the European Commission’s plans, arguing the proposals are not workable and could wreak havoc on markets.
London’s clearing house (LCH), which stands to lose a sizeable chunk of business from the EU strategy, has also pushed for the rethink.
Clearing houses are intermediaries standing between two parties in a trade to reduce market risk, according to the FT.
Since Brexit, clearing houses have been a key battleground, with the EU intent on moving important trades away from London and into Europe.
Europe’s largest banks, including BNP Paribas and Deutsche Bank, have openly opposed the plans, fearing extra costs and less efficient clearing processes.
The latest deadline, which the EU has said will be the final cut-off, is June 2025.