Yahoo Finance City veteran Spencer warns EU against plot to seize euro-clearing
Shifting euro-clearing away from Britain and into the eurozone would be a “deeply, deeply bad event” that could cripple European firms, City veteran Michael Spencer has warned.
Speaking to an audience in London yesterday, Mr Spencer said that such a move would make it impossible for eurozone institutions to access London clearing of the euro and be a “return to currency protectionism and nationalism, which would be a deeply, deeply bad event”.
Euro-clearing has been a key issue for the financial sector ever since Britain’s European Union referendum vote, with European politicians arguing that EU derivatives should be cleared in Europe rather than London following Brexit.
Mr Spencer, the chief executive of financial technology company Nex Group and a former Conservative Party treasurer, said that while the debate might “sound sort of reasonable”, the reality could be very different.
“The ramifications are really quite alarming because the only way they can repatriate euro-clearing from the UK into the eurozone is by effectively banning, or making it profoundly difficult for eurozone institutions to access euro-clearing in London,” he said.
He argued that there is already clearing of euro derivatives in Europe, so a shift of clearing to the bloc would make it impossible for European institutions to access London clearing of the euro.
Research published by EY last year forecast that a shift could cost up to 83,000 jobs in Britain, which is the global centre for clearing financial instruments.
