The European Union will move its London-based bank regulator to Paris or Frankfurt following Britain's decision to leave the bloc, while the European Central Bank will insist euro clearing occurs in the euro zone, a senior EU official has said.
"The multi-currency union narrative is over. That's why you will see the European Banking Authority going either to Paris or to Frankfurt," the official said.
"That's why you can be sure the ECB will install its location policy now. Not tomorrow, not in two weeks, but this is going to happen over the next two years," the official said, referring to a policy that euro clearing houses should be based in the single currency area.
Clearing houses serve as an intermediary between the two sides of stock and bond trades, ensuring the completion of transactions even if one side goes bust.
