E.C.B. Seeks Control Over London Trading After ‘Brexit’<br />By JACK EWINGJUNE 23, 2017<br />FRANKFURT — The European Central Bank took steps Friday to ensure it can oversee trillions of euros in London trading of derivatives<br />and other risky securities even after Britain leaves the European Union.<br />The central bank’s action was an example of how Britain’s vote to leave the bloc — which took place a year ago Friday — could force a realignment of financial markets<br />and undercut London’s status as a global trading center.<br />The central bank needs “to have enough control in time of crisis.”<br />London clearinghouses, which dominate trading in derivatives<br />and other securities denominated in euros, have become even more powerful in recent years.<br />Under new rules created to prevent a repeat of the 2008 financial crisis, regulators around the world have pushed banks<br />to carry out the trading of derivatives using clearinghouses, where the transactions can be better monitored.<br />Previously, banks typically traded many derivatives in secret with one another, making it difficult<br />for outsiders to know what kind of risks might be lurking in the financial system.
