All euro business should be moved from London after Brexit - top lawmaker

STRASBOURG (Reuters) - All financial business denominated in euros should be moved from London to the European Union after Britain leaves the bloc, an EU lawmaker said on Tuesday.

Manfred Weber, Chairman of the European People Party (EPP), take part in a summit of the party in St Julian's, Malta, March 30, 2017. REUTERS/Darrin Zammit Lupi

London is the world’s leading financial centre for the clearing of derivatives denominated in euros, a lucrative business that the European Central Bank had tried in vain two years ago to relocate to the euro zone.

But with Brexit, the case for London maintaining its leading role in euro-denominated business has become weaker.

“People expect that we do the euro business and all the business which is linked to the euro on European soil,” Manfred Weber, who heads the conservative grouping, the largest in the European Parliament, told a news conference in Strasbourg.

Weber, an ally of German Chancellor Angela Merkel, said that it was not conceivable that after Brexit business conducted in euros should remain in London.

He added that the bloc should protect the interests of EU financial hubs, like Paris, Frankfurt, Dublin and Amsterdam.

Weber declined to answer specific questions on whether this would involve the moving of clearing of euro-denominated derivatives.

The European Commission could propose a forced relocation from London to the European Union of the clearing business in legislative proposals on derivatives that are upcoming.

But the EU executive has so far refrained from taking a clear position on the issue, which could sour Brexit talks.

The ECB considers it crucial to have the clearing business in the euro zone to facilitate the supervision of activities that could endanger financial stability if not properly monitored.

Weber said his remarks on relocating business from London were general but added they were about “European supervision, the European Banking Authority (EBA) and defending European jobs”.

No reference was made to the relocation of financial business in the draft Brexit resolution that the European Parliament will adopt on Wednesday.

Lawmakers only said in their draft text that the London-based EBA, the European agency monitoring banking rules, should be relocated as quickly as possible.

Reporting by Francesco Guarascio; Editing by Philip Blenkinsop and Andrew Bolton