dailymail-The United States has warned European Union officials that forcing a lucrative London business to Europe post-Brexit could result in an international financial trade war. Christopher Giancarlo, acting chairman of the US The EU revealed earlier this month that it is looking at whether euro-denominated clearing, an activity dominated by London, should be moved to the single area after Britain leaves the bloc in 2019. Giancarlo warned that the EU should proceed with ‘care’. ‘To date, the US has not deemed a body of water – even as large as the Atlantic Ocean – as an impediment to effective CCP supervision and examination,’ Giancarlo said. The issue is politically sensitive at a time when Britain and the EU embark on divorce talks, with legislative proposals on clearing due from Brussels next month. In financial markets, clearing is the business of acting as an intermediary in a trade to reduce the risks from defaults by ensuring funds are delivered to the seller. Some 75 per cent of euro-denominated interest rate derivatives are cleared in the UK – and tens of thousands of jobs depend on the $1trillion business.Futures Trading Commission, said on Wednesday that Brussels’ plan to control euro-clearing post-Brexit would ‘undoubtedly inform the evolution of US regulatory policy’.
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