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WASHINGTON (Reuters) - The acting chair of the U.S. derivatives regulator said on Thursday he is concerned about how swaps will be cleared after "Brexit" is complete because of the possibility of the European Union deciding to prohibit off-shore clearing of swaps denominated in euros could hurt global financial markets.
Acting Commodity Futures Trading Commission J. Christopher Giancarlo said the United States has always been comfortable regulating clearinghouses that are not in the country but in which U.S. traders participate.
But he said that if the European Union decides that euro-denominated swaps need to be cleared in Europe, instead of London, where they have historically been handled, that would raise questions about the U.S. position. Britain is currently in the throes of withdrawing from the European Union, raising questions about the financial hub of London.
"And if the whole world were to go to that regime I think that would actually be detrimental to global markets, to global trade, to the dollar standing as the world's reserve currency," he said at a Congressional hearing on the regulator's budget.
"So I think there are tremendous ramifications that come out of how the negotiators on both sides of the Brexit consider this."
Reporting by Lisa Lambert; Editing by Chizu Nomiyama