The European Union said on Wednesday it has reached a provisional deal on a law aimed at shifting euro derivatives clearing by banks based in the bloc from London to the EU.
The bulk of clearing in euro denominated interest rate swaps, widely used by companies to hedge against unexpected moves in borrowing costs, is done by the London Stock Exchange Group.
Clearing ensures a stock, bond or derivatives trade is completed, even if one side of the transaction goes bust, and helps build liquidity in trading in a certain location.
