Tuesday 17 January 2017

Fight to attract financial services escalates as CME checks out Dublin

Published 15/11/2016 | 02:30

Global financial clearing-house CME Group is examining options in Dublin
Global financial clearing-house CME Group is examining options in Dublin

The battle to lure financial services jobs and business away from London after Brexit is intensifying.

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Global financial clearing-house CME Group is examining options in Dublin to ensure it keeps access to European Union customers after the UK leaves the bloc, according to people familiar with the discussions.

Managers at the Chicago-based derivatives exchange are weighing stronger ties to Ireland to ensure its London clearing operations aren't disrupted, but no decisions have been made, said the people, who asked not to be named because the conversations were private.

CME's options in Dublin could include seeking out regulatory licensing or opening offices. A spokesman for CME declined to comment.

The CME clearing business is small, but a shift to Dublin would be a notable coup.

Yesterday, the German finance ministry said it is fielding an increasing number of information requests from financial institutions in Britain considering a move to Germany.

Its financial centre, Frankfurt, is seeking to lure financial institutions from Britain, vying with Dublin, Paris and other European cities to attract business from London, Europe's dominant financial centre.

"Frankfurt is a love at second sight. But a love that lasts all the longer," state secretary Thomas Steffen, a senior finance ministry official, said at a banking conference.

He said he expected a number of decisions to be taken early in 2017.

For CME, the decision on where to base a clearing house, which plays a vital role in derivatives by acting as a firewall from failed trading firms, is important.

Clearing re-emerged as a battleground immediately after the Brexit vote, with French and German leaders arguing that clearing of euro denominated trades should not remain in London once the UK leaves. Regulations since the 2008 crisis boosted the importance of clearing houses, requiring many derivatives transactions to pass through them.

About 83,000 UK jobs are at risk if euro clearing is snatched away from London, according to a report commissioned by London Stock Exchange. (Additional reporting Bloomberg and Reuters)

Irish Independent

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