The Real Battle for the City of London
Clearing is an important business, but the loss of EU “equivalence” elsewhere is potentially devastating.
Not much to celebrate.
Photo: Bloomberg
Britain’s departure from the European Union has left a visible mark on the City of London. Almost overnight at the start of January, the world’s preeminent financial center lost about half of the share trading it used to handle, and a chunk of the buying and selling of derivatives. Next could be clearing, the market plumbing that guarantees the smooth matchmaking of buyers and sellers.
Clearing is a vital piece of financial infrastructure in which London dominates. Its sheer size — trillions of dollars of derivatives are cleared every day — make it an even grander political target for the EU than share trading. But it would be a mistake to consider this the most valuable chip still on the table.