According to the latest development, financial giants, Deutsche Bank AG, and UniCredit SpA will relocate their swaps trade from London to Frankfurt. This move has allegedly come as a consequence of the ongoing Brexit talks, as financial companies prepare for possible adversaries.
This trend of relocation has been observed with ten other banks, a case where lenders closed swap business in the UK in order to relocate in Frankfurt. Such companies include Commerzbank AG, JPMorgan Chase & Co., Bayerische Landesbank, Bank of England are a few to name. Reports suggest that these banks saw this move as an opportunity to produce revenue through a cooperative bank trade of the kind.
According to reports, the relocation of swaps could possibly weaken the dominant status of London in Europe’s financial center. Moreover, continental European banks would allegedly be unable to retain their swaps in London starting April next year. So far the two financial companies in question have declined to comment on the new development. This move of swaps has been observed as another case where London is loosening its control in the swap market.