VALLETTA (Reuters) - The European Commission will reflect carefully on the location of euro-denominated derivatives clearing, a business mostly done in London now and that will be outside the EU when Britain leaves the bloc, the EU executive’s vice president said on Thursday.
Speaking to an audience of finance experts in Malta, Valdis Dombrovskis said a key issue that the Commission will have to analyse is how to deal with a market that is of great importance for EU’s financial stability but will be mostly outside the EU after Brexit.
“This will surely be a matter of important reflection in the coming months and years,” Dombrovskis said, noting that the EU regulatory framework for derivatives clearing was working well and was there to stay.
“An area in which Brexit will profoundly change the EU’s financial landscape is central clearing of derivatives,” Dombrovskis added, but stopped short of saying clearly that clearing should be relocated from London, as urged by the European Central Bank and EU lawmakers.
The European Commission could suggest a forced relocation from London to the European Union of the clearing business when it reviews the rules on derivatives in June.
But the EU executive has so far refrained from taking a clear position on the issue, which could sour Brexit talks.
Reporting by Francesco Guarascio @fraguarascio; Editing by Alison Williams