Germany's biggest lender Deutsche Bank said Monday it has moved "a big part" of its euro clearing operations from London to Frankfurt, in a new blow to the City as Britain leaves the EU.
With Brexit due on March 30 next year, "Deutsche Bank has begun to clear out a big part of its euro clearings to Eurex Clearing," said a spokesman for the bank, confirming a report in the Financial Times, which said the bank has shifted close to half of the operations.
Eurex Clearing is a subsidiary of Deutsche Boerse, which over the last months has been seeking to claw away business from London's LCH Clearnet, the clearing house operated by the London Stock Exchange and which has long held a quasi monopoly on euro clearing operations.
Clearing houses are a key part of the financial system's plumbing, with trillions of euros being handled every year, almost exclusively out of London.
Such institutions act as an intermediary between buyers and sellers of financial instruments, and carry out operations like settling trading accounts.
Deutsche Bank said the shift would not involve job transfers.
Rather, its employees in London would be "pushing another button" that sends the clearing operation to Frankfurt rather than to the clearing house in London, said the spokesman.
But if other banks were to follow suit and move their clearing operations out of London, the City could lose its dominant position as a euro clearing hub.
The question of whether euro clearing houses can remain in London is one of the most contentious issues when Britain negotiates its future trade relationship with the EU after its departure.