European regulator gives London City a heavy blow

European regulator gives London City a heavy blow
European regulator gives London City a heavy blow


25 november 2020
Today at
15:00

European banks and investors are not allowed to work under UK rules when trading derivatives contracts in London. That other world financial center, New York, is laughing.

‘We understand that this situation is a challenge for the London offices of European banks. They may have to intervene to stay in line with European legislation, ‘says the Paris-based European regulator ESMA in explaining its decision.

ESMA decided – five weeks before the end of the Brexit transition period – that European banks and brokers that trade in derivatives in London are subject to European regulations. The British regulator had hoped that those banks could operate under British rules.

The City of London is a world center for derivatives. London plays a leading role in the interest rate swap market – worth $ 364,000 billion. In an interest rate swap, parties exchange interest payments, for example a fixed interest in exchange for a variable interest.

Goldman Sachs

The decision of ESMA threatens to oblige banks to relocate derivatives trading to another country in the European Union. Goldman Sachs recently decided to install a new trading room in Paris. Other banks also have plans to relocate London staff to other EU countries before the end of the year.

There is also another option than moving to Europe. Banks can trade in countries that operate under derivatives rules approved by the European regulator. This includes Wall Street. It therefore looks like the US will have a larger market share in derivatives in the future.

These were the details of the news European regulator gives London City a heavy blow for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at news1.news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV Thai royalists launch political party to protect monarchy
NEXT India's foreign ministry launches app to connect to citizens abroad