Exclusive: Top banks asked to justify why they still clear euro swaps in London

Europe’s top banks must justify why they should not have to shift clearing of euro-denominated derivatives worth billions of euros from London to the European Union after Brexit, an EU document seen by Reuters on Tuesday showed.

Clearers in Britain have EU permission to continue clearing for EU customers until mid-2022 to give banks time to shift their euro positions to the continent, but switching has been slow.

“The current level of exposure to UK central counterparties (CCPs) raises a number of issues for the EU that should be addressed by a reduction in the EU’s exposure to UK CCPs,” the European Commission said in a questionnaire sent to banks.