Daily Management Review

Deutsche Boerse preparing to reduce its footprint in London after Brexit


10/09/2017


While the LSE’s LCH unit has been the predominant clearing house for IRSs in Europe, with Brexit’s growing uncertainly, banks including Deutsche Boerse are taking steps to move voluminous transactions to Eurex, German clearing unit.



Under the threat of Brexit, banks which service cross-border markets are increasingly feeling pressured over growing uncertainties.

In order to mitigate these pressing concerns, Deutsche Boerse has introduced a profit-sharing scheme that will essentially wrest volumes from the London Stock Exchange to Eurex, a German exchange’s clearing unit.

On its part Eurex has stated it will be launching a partnership program to attract more volume in clearing interest rate swaps (IRS) in November.

IRS contracts have become more popular in the wake of Brexit, with companies using the derivatives to insure themselves against adverse moves in borrowing costs.

The London Stock Exchange’s LCH unit has dominated the IRS scene in Europe.


 


 


 


 


 

Source:

https://www.reuters.com








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