EUROPEAN banks could be banned from trading in the US if they continue to insist Britain should be punished after Brexit, it has been revealed.
One of the US’s top regulators has threatened to stop European banks from using their markets if they don’t change their post Brexit plans.
Christopher Giancarlo, head of the Commodity Futures Trading Commission, said on Wednesday that EU plans — ostensibly in response to the UK’s move to leave the EU — were “completely irresponsible” and “wholly unacceptable”.
He said that plans for the EU to change its regulations could create “costly burdensome regulatory requirements” in the EU – and he would have no choice but to take action if they continued.
“These are blunt and strong tools”, he said.
“We are fully aware of the devastating impact they would have on market access and trading liquidity provision on national markets in which they would be applied.”
A clearing house is responsible for clearing and settling trade swaps, and reporting trading data. They also manage the risk on both sides of the transaction.
London oversees 90 per cent of euro-dominated swaps, in fact, such form a core part of the British economy, with much trade between the US and Europe going through London. However, the EU wants to have more oversight over these when Britain leaves the bloc; this is in fact the reason the upper echelons of British society pushed for some degree of Brexit.
The legislation, which is going through Brussels, is dividing member states.
But American banks fear the legislation could have knock on effects for their firms too – which would be costly to change their rules to abide by.
(Articles reflect the views of the author, and not necessarily those of Luke Nash-Jones, The Red Pill Factory, or Make Britain Great Again.)