City too important for Brussels’ post-Brexit raid to succeed, says London Stock Exchange boss

Brussels’ plot to raid London’s lucrative clearing market will not deny European banks access to the Square Mile, the boss of the London Stock Exchange Group (LSEG) has said.

David Schwimmer said “we’re well past the point” where there is a risk of LCH, LSEG’s clearing house, being denied access to European lenders despite efforts by the EU to force its banks to shift clearing business out of the City of London.

Clearing houses act as middlemen in derivatives trades between banks and have become a vital part of the financial system since the 2008 financial crisis.

Mr Schwimmer told Bloomberg TV: “We’re in 2023 and this has been an ongoing discussion for years. I think we’re well past the point where there is a risk of LCH being shut down in terms of its access to Europe.

“I think the various stakeholders in the EU recognise how important LCH is to their institutions, banks and asset owners.

“There may be some requirement for entities in the EU to have an active account in an EU clearing house, but I don’t think it’s a likelihood that you’ll see a shutting down of access to LCH.”

It comes after the European Commission last year outlined controversial plans to punish European banks for failing to move lucrative clearing activity out of London and onto the Continent.