The Deputy Governor of the Bank of England, Sir Jon Cunliffe, has warned that any attempts by Brussels to attract UK business away from the City of London would result in higher finance costs and have a negative impact on the whole of Europe. Speaking in the House of Lords, the Deputy Governor expressed doubts that any other financial centre in Europe would be able to replicate the city of London, and large sections of the financial industry would be more likely to move to New York or simply close – ‘The City’s financial district is a complex ecosystem with very deep and liquid markets, which had taken years to create and is matched only by New York’. The French President, Francois Hollande, has tried to attract UK business to Paris recently by declaring that he wants clearing of euro-denominated contracts (such as derivatives) moved to the single currency area. Sir Jon Cunliffe however does not believe that London will lose clearing – ‘three quarters of London-based clearing is in dollars and only a quarter in euros – fragmenting the multi-currency infrastructure would only make it more expensive’.
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