Brexit fears see Deutsche move euro clearing from London to Frankfurt

Global banking giant Deutsche Bank has begun clearing a “large part” of new euro-denominated derivatives trades in Frankfurt instead of London in anticipation of the expected fallout from Brexit.

A spokesman for the investment bank confirmed the moving of the process which ensures a transaction is completed even if one side of the deal goes bust.

It is expected that the move taken by Germany’s largest bank will help Deutsche Boerse’s efforts to attract a large part of the euro clearing market from London as Britain exits the European Union.

It follow news last week that Lloyds Banking Group is moving more of its operations to Europe than previously anticipated.

Lloyds, which owns Bank of Scotland, is also choosing Germany for the location of its continental bases.

Lloyds had been expected to run the majority of its continental business from Berlin, where it has around 300 staff.

However, it now plans to open an additional subsidiary in Frankfurt to support its euro bond trading business, and a third operation will support its closed-book insurance business.

Today’s announcement from Deutsche will largely be seen as symbolic, as its home base is in Frankfurt where the bank is also transferring some other activities due to Brexit.

And the Deutsche Bank spokesman said no jobs were being transferred and that the bank was effectively pushing a different button to route the clearing to Eurex, Deutsche Boerse’s clearing division.

However, the development is expected to cause more concern in the Square Mile as fears increase that yet more activities like trading and jobs could soon begin to follow.