Bank Execs in Davos Privately Say London Clearing Probably Safe
- ECB has said it should keep clearing oversight after Brexit
- U.S. tolerates massive dollar derivatives clearing in London
HSBC CEO: London Will Remain Global Financial Center
London will probably end up winning the battle over its clearing industry, according to four top bankers in Davos, adding to the debate over whether the U.K.’s financial industry will be stripped of a crown jewel.
Despite French and German threats to claw away clearing in euro-denominated derivatives, Britain will probably continue to house trillions of euros of swaps trades because limiting where the operations can take place could backfire, said the executives from several global firms, speaking on condition of anonymity at events around the Swiss ski resort. Imposing controls on how and where the common currency is used could damage its reserve status, they said.
Clearing usually isn’t cocktail conversation in Davos, but Europe’s financial plumbing has been a top concern among power brokers since Britain’s June vote to leave the European Union. Bankers have not been unanimous in their views, however. Executives at four of the biggest global investment banks in London in September said they expect France and Germany will prevail in the clearing tussle.