Europe Better Than U.K. at Courting Finance Firms, ICE CEO Says

  • EU pitch includes information about schooling, real estate
  • U.K. has better hand in negotiations than some think, CEO says

The European Union is doing a better job than the U.K. at courting financial firms as the U.K. heads toward leaving the bloc, says the head of Atlanta-based market operator Intercontinental Exchange Inc.

Speaking at at a conference in London, ICE Chief Executive Officer Jeffrey Sprecher said that when he has talked to U.K. officials, they’re light on detail about luring business. But when Dutch, French and German officials approach the company -- a powerhouse in derivatives trading and clearing -- they’re armed with incentives and information about schooling, taxes and office real estate, Sprecher said.

Jeffrey Sprecher

Photographer: Andrew Harrer/Bloomberg

The U.K. should “have a bit of swagger,’’ said Sprecher, whose company operates a clearinghouse in London and previously owned stock market operator Euronext NV.

London’s defense of its financial services industry has been a top concern since the Brexit vote last year. As negotiations are set to begin later in 2017, EU officials have toughened their negotiating stance in recent days, adding new limits on banks and explicit demands on citizens’ residency rights to their plan for the talks.

Still, the U.K. has a stronger hand in negotiations than some reports and commentaries suggest, Sprecher said. Britain has the dominant financial infrastructure and as well as the access to capital, which means EU customers must find a way to reach U.K. companies as well, he said.

It’s “the people with the money who normally get to make the rules in society,” he said. Many clients in continental Europe are asking how they will access ICE after Brexit, he said.

London’s dominant role in clearing euro derivatives is seen as one of the most vulnerable dominoes in the City and is a bellwether for negotiations. France and Germany contested London’s leading position in euro derivatives before Brexit, and officials there say it can’t be tolerated now.

The ramifications of moving euro clearing from London are “dangerous” and “alarming,” Michael Spencer, CEO of NEX Group Plc, said during the same conference panel. Europe would in effect be punishing itself, and all markets would be worse off, Spencer said.

— With assistance by Will Hadfield

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