Bank of England cautions EU over cross-border financial firms

LONDON, Feb 11 (Reuters) - Cross border supervision of major financial firms need to be worked out carefully to avoid ending up with “multiple pairs of hands on the steering wheel”, Bank of England Deputy Governor Jon Cunliffe said on Tuesday.

Britain left the EU last month and is seeking access to the bloc’s financial market once a “business-as-usual” transition period ends in December.

The London Stock Exchange’s LCH unit clears the bulk of euro denominated swaps, but access to clients in the EU after December has yet to be worked out.

The EU has said any access would be contingent on EU regulators being able to supervise cross-border firms like LCH very closely, but Cunliffe cautioned about being too intrusive.

“Effective supervision of systemically important firms in business as usual cannot be achieved with multiple hands on the steering wheel,” Cunliffe said in a speech in Berlin.

“Firms need clear and consistent messages. This is true, a fortiori, at times of stress.”

Arrangements for shared supervision need to be worked out carefully, subject to agreed procedures and recognise the primacy of a financial firm’s home supervisor, Cunliffe said. (Reporting by Andy Bruce and Huw Jones)