Published On: Tue, Apr 11th, 2017

French finance chief demands Euro institutions QUIT London after Brexit to make UK PAY

London could suffer huge trading losses after Michel Sapin said the City would have lucrative deals ripped away from its banks once negotiations are finalised.

He claimed allowing European institutions to continue operating in the UK would threaten the Eurozone’s “sovereignty”.

And he added traders must now begin relocating key processes, such as the clearing off euro-dominated derivatives, to bring them under full control.

London is considered to be the European hub for trading in swaps – handling £724billion ($ 900bn) a day in deals.

But the position has long since been a bone of contention in Europe – which has only heightened since the UK opted to leave the EU.

Now European bosses are trying to claw back control, and will force huge losses on London to do so.

French president François Hollande has repeatedly warned the vote for Brexit will have consequences – including the repatriation of clearing to the continent. 

Brussels lawmakers and regulators interjected – suggesting the concerns could instead be addressed by making sure that EU financial supervisors play a role in overseeing the City after Brexit.

But Mr Sapin insists their ideas will not work, and has demanded all euro-dominated operations move back to the mainland.

He said: “Everyone sees that… this goes to the heart of the resilience of our [financial market] arrangements and of our sovereignty over our money.

“The strategic vision is that we must be masters, as Great Britain is the master when it comes to the rules that apply for the pound sterling, of the authorities that oversee the resilience of our arrangements.

“And we are going to have this sovereignty.”

And he added the kind of oversight that would be necessary to ease Eurozone-area concerns would be deemed unacceptable by Britain.

He said: “I understood that one of the most effective stimuli and motivations behind Brexit was that Great Britain should take back its sovereignty.

“If Great Britain accepts today that the rules in force in London should be of the same nature, level, with the same effects [as those in Europe] and with the same judges to settles questions about how to apply them, I would say why not. 

“But this doesn’t seem to correspond to the prevailing mood [in the UK].”

The comments come just days after German finance minister made similar demands – pitching Frankfurt as an ideal alternative to the British capital.

Wolfgang Schäuble claims the financial centre there has “an all-in-one feature compared to all other financial centres”.

Academics estimate up to 30 per cent of jobs could migrate to Frankfurt or Paris as large financial institutions expand to the European mainland.

While smaller banks are expected to merge with companies in Frankfurt and Paris.

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