Thursday 21 September 2017

ECB chief fears 'race to bottom' in Brexit jobs fight

Daniele Nouy, the chair of the European Central Bank's Supervisory Board. Photo: Martin Leissl/Bloomberg
Daniele Nouy, the chair of the European Central Bank's Supervisory Board. Photo: Martin Leissl/Bloomberg
Junior minister Eoghan Murphy
Colm Kelpie

Colm Kelpie

A top ECB official has echoed Irish fears of a "race to the bottom" as some European Union countries ease supervisory standards in order to attract UK banks seeking access to the market after Britain leaves the EU.

"Incoming banks might exploit these differences and trigger a race to the bottom in terms of supervision," Daniele Nouy, the head of the ECB's supervisory arm, said yesterday.

"We are worried about such a scenario - particularly in respect of large third-country branches."

That view concurs with concerns originally raised by Irish Financial Services Minister Eoghan Murphy.

Meanwhile, the UK Government sought to dismiss as "speculation" claims that the European Commission will be rushing out proposals to force the lucrative business of "clearing", or managing, massive financial trades involving euro away from London.

The Commission is due to publish proposals for regulating derivatives this week, but banking industry officials have said attempts to curb clearing of euro-denominated contracts could emerge by June.

The UK has fought a long battle with the ECB to keep the business, which has gravitated to London over other markets, but that will become harder after Brexit.

"This is speculation, it has come up before," the spokesman told reporters after being asked about a report in the 'Financial Times'.

Britain is Europe's biggest financial centre, trading and clearing a large number of euro and euro-denominated deals that support thousands of jobs.

Irish Independent

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