Clearing made easier and more resilient – but you can't make an omelette without breaking eggs

Further reform of the rules on market infrastructures under the European Market Infrastructures Regulation (EMIR) aims to bring more clearing (from the UK) to the EU. However, once again it does not integrate supervision into the process and avoids confrontation with Member States on the matter. EU-based users of central counterparty clearing houses (CCPs) abroad will also be required to have active accounts at EU CCPs. Although this may reduce financial stability concerns with third countries, it will create competitive disadvantages for EU banks.

If the EU’s aim is to make the European CCP ecosystem more attractive and competitive, then avoiding confrontation is not the answer. It’s time to start breaking some eggs.

Karel Lannoo is General Manager of ECMI and CEO of CEPS.