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ECB weighs "action" to control foreign clearing of euros, Mersch says 

May 19, 2017

Francesco Canepa, Yahoo Finance

Euro zone central banks must consider "action" to maintain control of clearing securities trading denominated in euros that occurs outside the European Union after Britain's decision to leave the EU, a European Central Bank director said on Thursday.

The clearing in London of trillions of euros worth of trades denominated in euros has become a key point of contention since Britain's vote to leave the EU last June.

With more than 90 percent of the euro-denominated derivatives business of euro zone banks cleared via Britain-based firms, Yves Mersch said the Eurosystem risked losing control of a key factor for the stability of the euro.

"The UK’s recent decision to leave the EU has called into question the ability of authorities such as the Eurosystem to ensure they can continue to adequately control the impact of offshore clearing activities while maintaining the stability of their currency," Mersch said at an event in Luxembourg.

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