Huw Jones

LONDON (Reuters), – According to a BoE senior official, the Bank of England won’t ‘politicize” how foreign clearinghouses are managed. Instead it will respond with ‘titfortat’ answers to EU decisions.

Christina Segal-Knowles is the BoE’s executive director for the financial market infrastructure. She presented in a paper a plan by the BoE to supervise clearinghouses offering services in Britain.

Britain will wait to see if EU allows investors to continue to use London’s clearing houses following next June when temporary EU market access is revoked.

Participants in the market have asked for clarity from the EU. This is to avoid any disruption caused by Brussels’s relentless pressure on banks to switch clearing from London to Frankfurt.

As the bloc seeks to reduce reliance on London’s City of London, Euro clearing is now highly politicised in Brussels.

Segal Knowles claimed that Britain was “very consistent in making sure that there is no “cliff edge” for foreign clearingers when it comes to accessing Britain.

Segal-Knowles stated that “that will continue to be the approach,” at an Futures Industry Association event. The way Britain will treat foreign clearers is “timely”, smooth, and predictable she stated.

She stated, “It is important that these matters aren’t politicised… We want that that’s done very technocratically and predicable way, it’s no tit-fortat.”

Although there were no UK regulations requiring cross-border clearinghouse access in one direction only, Britain must maintain a trust relationship with home authorities in foreign clearing houses, she stated.

The EU and Britain have had strained relations over Northern Ireland fishing rights and are still waiting to ratify a forum for cross-border regulation of financial services almost one year after Britain left.