Covid helps London maintain clearing house role even post-Brexit
Eurex has 19% of the Euro derivative market, LSH still has the rest. Rules which would favor Eurex have been put on hold due to covid. Lawyers said banks will not move positions from London to Frankfurt voluntarily because of costs and complexity at a time when they are firefighting the pandemic. Given the lack of movement, the EU is set to decide in the next few weeks on the length of time it will allow LCH’s clearing of euro swaps for EU customers to continue after Britain’s full access to the EU ends in December. There is a political cost for Britain to maintain EU access for its financial services industry - the Bank of England will have to allow EU securities watchdog ESMA to jointly supervise LCH.