UK wins rare victory in EU courts over sites of euro clearing houses
LONDON will not lose its euro-denominated clearing houses to finance centres in the Eurozone, as the European Court of Justice ruled in Britain’s favour on the controversy.
The European Central Bank (ECB) had tried to force clearing houses to move into the Eurozone.
That would harm the UK which is the biggest centre for clearing euro-denominated trades. Britain appealed the ECB on the basis the decision broke the single market rules, and discriminated against non-Eurozone states.
“The ECB lacks the competence necessary to regulate the activity of securities clearing systems as its competence is limited to payment systems alone”, and not to clearing houses, the General Court said.
If the ECB still wants to force the change, it must ask EU legislators to change the law, the ruling said.
The Treasury, MPs and City groups all welcomed the news.
“This is unexpected and extremely welcome news. Common sense has prevailed,” said Andrew Tyrie MP, who heads the Treasury Select Committee. “In insisting that euro clearing houses should be based in the Eurozone, the ECB would have undermined the free movement of capital and services across the EU.”