EU moves to gain control of key London financial market
LONDON — The European Union moved Tuesday to tighten its oversight of a key financial market based in London, threatening tens of thousands of jobs in Britain once the country exits the bloc.
Draft regulations published by the EU executive Commission would force any clearinghouse considered important to the EU financial system to accept direct oversight from the bloc and, if requested, relocate to inside the EU.
Clearinghouses act as intermediaries to reduce the risk of default by ensuring funds are delivered to the seller — a way of undergirding the financial system.
Even though Britain is not part of the euro, it is the home to the vast majority of clearing of euro-denominated financial contracts, which amount to almost $1 trillion every day. One report suggests that losing the market could cost the country 83,000 jobs, mostly in London, one of the world’s top finance hubs.