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TEHRAN, July 30- Deutsche Bank (DBKGn.DE) has begun clearing a “large part” of new euro-denominated derivatives trades in Frankfurt instead of London, a spokesman confirmed on Monday as a key Brexit battleground in financial services heats up.
TEHRAN, Young Journalists Club (YJC) - Deutsche Bank (DBKGn.DE) has begun clearing a “large part” of new euro-denominated derivatives trades in Frankfurt instead of London, a spokesman confirmed on Monday as a key Brexit battleground in financial services heats up.
The shift by Germany’s largest bank is will help Deutsche Boerse’s (DB1Gn.DE) efforts to attract a large part of the euro clearing market from London as Britain exits the European Union.
Clearing ensures a transaction is completed, even if one side of the deal goes bust.
The worry for the City of London is that if chunks of clearing move elsewhere, other activities like trading and jobs could follow, eating away at Britain’s biggest economic sector.
London Stock Exchange’s (LSE.L) LCH division has long dominated clearing of euro-denominated derivatives like interest rate swaps used by companies to cover themselves against unexpected moves in borrowing costs.
LSE had no immediate comment.
The move is largely symbolic and was widely expected given that Deutsche Bank’s home base is in Frankfurt, where the bank is also transferring some other activities due to Brexit.
Source:Reuters
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