The City of London should be deposed as the euro’s main financial centre so the single currency club can “control” most financial business in the eurozone, France’s central bank governor has said.
Christian Noyer of the Banque de France said there was “no rationale” for allowing the euro area’s financial hub to be “offshore”, in a blunt assessment that will fan UK concerns over EU rules being rigged against it.
“Most of the euro business should be done inside the euro area. It’s linked to the capacity of the central bank to provide liquidity and ensure oversight of its own currency,” Mr Noyer told the Financial Times while touring Asia to promote Paris as a renminbi trading centre. “We’re not against some business being done in London, but the bulk of the business should be under our control. That’s the consequence of the choice by the UK to remain outside the euro area.”
Since the creation of the single currency, the City has served as its main financial hub. More than 40 per cent of worldwide euro foreign-exchange is handled in London, a bigger share than the eurozone combined.
As a result, London is acutely sensitive to any alleged discrimination across the EU single market. Britain last year sued the ECB over its “location policy” for clearing houses, which if enforced would require critical parts of London’s financial infrastructure to decamp to the euro area.
France strongly supports the policy on grounds of financial stability. The ECB argues such essential business should be done in the euro area so that liquidity support can be guaranteed when needed and crises are not handled by multiple central banks with conflicting interests.
Read more: UK’s euro trade supremacy under attack - FT.com
No comments:
Post a Comment