Germany’s largest lender, Deutsche Bank, has moved a chunk of its euro-clearing activities from London to Frankfurt, according to a report in the Financial Times newspaper.
News that it has moved around half of its operations in that field to Frankfurt is the latest sign of the pressure UK financial services operations will come under from EU-based rivals in the wake of Brexit.
As reported by Deutsche Welle (DW), Germany’s international broadcaster, Deutsche Bank is one of the five largest clearers of interest derivatives and their tilt toward Frankfurt is a boost to the financial services market in Germany, which is in line to take significant business from London, depending on how the Brexit cards ultimately fall.
The London Stock Exchange Group, has warned that up to 100,000 jobs could be lost if the City of London — the business and financial district — lost its status as the euro-clearing hub.
According to DW, with the UK scheduled to officially leave the EU in March 2019, EU politicians and policymakers have been calling for direct regulation of central counterparty clearing houses after Brexit, due to the fact that they affect financial stability.
“To minimise risk for financial stability, it is indispensable that [the clearing of euro-derivatives] is subject to strong regulation and supervision in full conformity with EU standards,” Olaf Scholz, Germany’s finance minister, said last month.
