Andrew Bailey: There is ‘high level of uncertainty in economy’

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The bloc warned last week it would prolong for the last time permission for Britain’s clearing houses to continue serving customers based in the EU. After 2025, “there will be no extension”, an official confirmed.

In an effort to axe the plans, Andrew Bailey, Governor of the Bank of England, warned Brussels against “seeking to fragment the international system”.

A clearing house acts as an intermediary between a buyer and a seller and validates transactions.

The clearing market in London alone is reported to stand at a worth of around £80trillion.

London’s trade in the market is heavily tied to EU countries, which themselves are bound to be eyeing up new deals after the UK is locked out in 2025.

Clearing houses have become an important aspect of the financial market since the 2008 crash.

Mr Bailey told an event organised by TheCityUK that ending the UK’s access would be damaging not just at home but abroad.

He said: “Seeking to fragment the international system cannot be justified in light of the success of the post financial crisis approach.”

Mr Bailey, quoted in the Telegraph, added: “We will continue to work in strong cooperation with EU authorities to ensure risks in clearing houses are well managed, as we do with other authorities in other countries.

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“But I have to say that maintaining a shared deep commitment to open markets and open financial systems with strong and appropriate regulatory standards and cooperation to support them means that there need be no time limit to this equivalence.”

One EU official, quoted in Reuters, insisted cooperation must come to an end in three years time, regardless of complaints.

They said: “It’s clearly the end of the road.

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“There will be no extension after those three years.”

German MEP Markus Ferber added: “In the long run, euro clearing has to take place in Europe.”

Despite concerns over fragmentation after the 2025 deadline, confidence is high London will remain the financial capital of Europe over the next decade.

A survey of high-net-worth individuals (HNWIs) in the UK, conducted towards the end of the year found an impressive 80 percent were confident about the future of Britain’s economy.

Thirty-three percent said they feel “very confident”.

Three-quarters of HNWIs living in the capital said they believed it would top all over European cities for at least the next 10 years.

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