- European Central Bank reportedly wants to crack down on a practice known as "back-to-back" booking after Brexit.
- The process effectively sees banks and other institutions carry out business in one market, but book that activity in another.
- Many in the City believed the continued use of back-to-back booking would have helped London retain its European financial crown after Brexit.
ADVERTISEMENT
Europe is closing a trading loophole that banks were relying to cope with Brexit
European Central Bank reportedly wants to crack down on a practice known as "back-to-back" booking after Brexit.
The European Central Bank reportedly wants to crack down on a practice that many in the City believe would have helped London retain its European financial crown after Brexit.
The ECB has written to major financial institutions to urge them to decrease their reliance on the use of the so-called "back-to-back" booking of trades and loans, according to a report in the Financial Times on Monday.
The process effectively sees banks and other institutions carry out business in one market, but book that activity in another. For example, a bank might carry out a piece of business in Paris, but transact it in London.
ADVERTISEMENT
Many financial institutions have reportedly been planning on using back-to-back booking as a means of continuing to centralize many of their European activities in London even after the UK loses its financial "passporting" rights during Brexit.
The ECB, however, appears to be pouring cold water on these plans. The FT's report suggests that the ECB will give financial institutions until 2022 to "
JOIN OUR PULSE COMMUNITY!
ADVERTISEMENT
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
ADVERTISEMENT