Clearing of euro-denominated financial contracts will have to leave London and stay inside the European Union when Britain leaves the bloc's single market, BlackRock's Philipp Hildebrand said today. 

Britain is the main centre for the multi-billion-euro clearing business - mainly via the London Stock Exchange's Clearnet business.

But its dominance in this area has been called into question by Brexit. 

"One thing is very clear to me that if you are really outside, I don't see how clearing can be outside the European Union," said Hildebrand, vice chairman of BlackRock, the world's biggest asset manager.

"It seems fairly obvious to me that if the end result is indeed a hard Brexit, ie completely out of the European Union, the single market, I don't really see how the core financial functions, clearing being one of them, could be anywhere but inside the European Union," Hildebrand told a banking conference in Dublin. 

British Prime Minister Theresa May made it clear last week that Britain would leave the EU's single market of 500 million people. 

An EU official told Reuters last month that the bloc is considering legislative measures to take clearing of euro-denominated derivatives and other financial contracts into the euro zone, a change of location which Hildebrand said appears "fairly self evident". 

Frankfurt or Paris are seen as the most likely centres to take euro clearing business if it moves from London. 

The London Stock Exchange has agreed to sell its French clearing business to Paris-based Euronext to appease regulators looking into its planned merger with Deutsche Boerse DB1Gn.DE.

But it said last week that it had no plans to shift other parts of its clearing business to Germany. 

Britain's financial services minister Simon Kirby told Reuters last week, ahead of May's speech, that keeping the euro-denominated clearing business in London even after Britain leaves the European Union is in Europe's interest.