As announced in January at the Ecofin Council (see EUROPE 12871/28), the European Commission decided on Tuesday 8 February to extend until 30 June 2025 the decision establishing the equivalence of European (Regulation 648/2012) and UK rules on the supervision of central clearing houses (CCPs). This decision will ensure the financial stability of the European Union in the short term, according to the EU institution.
“We must reduce overdependence on CCPs outside the EU as a matter of financial stability”, said EU Financial Services Commissioner Mairead McGuinness via Twitter.
A CCP enhances financial stability by interposing itself between two counterparties to a contract involving, for example, financial derivatives. The main objective is to manage the risk that could arise if one of the counterparties defaults.
After Brexit, the EU financial system’s heavy reliance on UK-based CCPs raises important financial stability issues.
“Today we are launching a public consultation on developing clearing in the EU, while extending equivalence for UK CCPs for three years to allow us to build capacity”, Ms McGuinness added via Twitter.
See the equivalence decision: https://aeur.eu/f/92
The European Commission is seeking stakeholders’ views on changes to the EU’s CCP supervisory arrangements to improve the attractiveness of the EU and reduce the EU’s dependence on third countries. In the second half of the year, the European Commission will present measures to develop the activities of CCPs in the internal market.
“Either we consider that the clearing market will always be based in London - fine, maybe. Or we consider that there is a question of sovereignty in making a European market, and we have to say that there will be a moment when clearing in the United Kingdom will stop”, said Clément Beaune, French Secretary of State for European Affairs, on Friday 4 February 2022.
More information on the consultation, which is open until Tuesday 8 March: https://aeur.eu/f/93
See the call for papers: https://aeur.eu/f/94 (Original version in French by Anne Damiani)