City of London Corporation urges UK and EU to reach agreement on clearing
City of London Corporation Policy Chair Catherine McGuinness has today [6 October 2021] called on the UK and EU to urgently reach agreement on a deal to permit European banks access to UK clearing houses.
Speaking at the L’Agefi Global Invest Forum in Paris, the Policy Chair said the ‘clock is ticking’ for a decision on the issue, with temporary arrangements put in place by the EU set to expire at the at the end of June 2022.
Clearing houses play a critical role in financial transactions, acting as an intermediary between buyers and sellers to speed up the process and ensure stability. London is a world leader in clearing of all types of currency-denominated derivatives, with the majority of transactions being processed by the London Stock Exchange Group owned LCH.
The call by the City Corporation follows publication of a letter from industry associations in September urging the EU to either extend the current temporary permission or grant open-ended permission.
Speaking in Paris, City of London Corporation Policy Chair Catherine McGuinness said:
“The issue of clearing is a real worry for many of us in the City.
“If the current time-limited equivalence decision is allowed to lapse at the end of June 2022, there is a significant risk of market disruption for EU clearing members and their clients.
“That would hurt both the UK and many countries in Europe, just as COVID recovery gathers pace.
“It’s therefore imperative that we find a way forward together to solve this issue, and I am hopeful we can.”
The Policy Chair also used her speech to urge EU partners to take part in discussions on sustainable finance at the UN Climate Change Conference – better known as COP26 – in Glasgow in November.
She urged participants to register for the upcoming hybrid Green Horizon Summit at COP26, which the City of London Corporation is holding alongside the Green Finance Institute.
The Summit will bring together figures from the financial and professional services sector across the world to discuss how best to mobilise finance in the transition to net zero emissions. It will look at a number of crucial topics, including barriers to accelerating the mobilisation of capital, financing both transition and growth, and how to price carbon and nature. It will also discuss how to mobilise investment into emerging and developing economies.
Notes to editors
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk