Deutsche Boerse boss rows back on landgrab, but German finance minister Olaf Scholz insists ‘large parts’ of euro clearing will leave London after Brexit
The head of the Deutsche Boerse has appeared to row back on his immediate plans for a post-Brexit landgrab on London's euro clearing industry.
Speaking on Thursday morning at a conference organised by German newspaper Handelsblatt, Theo Weimer put the odds of increasing his exchange's current market share of around eight per cent at just “50-50”, according to the FT.
In February, he said he was targeting a total market share of 25 per cent by 2019.
However, speaking at the same conference, Germany's finance minister said "large parts" of London's mammoth euro clearing market remained under threat.
Olaf Scholz said the move from London to a EU-based clearing house would take place over time, with Frankfurt being well-positioned to attract the bulk of the business.
"In any case, the consequence of Brexit will be that activities will be transferred to the continent – part of it to Germany and Frankfurt in particular," he said. "But we have to understand what the consequences are."
He added it was now about "how you can bring the major German banks back to the front", saying business models had to be "urgently optimised".
The London Stock Exchange’s LCH processes up to €1 trillion of notional deals a day.
Scholz argued that clearing was so important for the overall economy that it would be "not entirely unproblematic" to have it located outside the EU’s jurisdiction.
"It's not just our job to make sure this is well-regulated, this must be backed up by a stabilising institution," said the politician, adding it would be "hard to imagine" such oversight could be handed to a regulator outside the EU. "This needs to work when things get hairy."