UK faces defeat over derivatives clearing
Britain is bracing for defeat in Brussels on a critical piece of financial regulation, which would force it to cede control over the shape of key markets in the City of London, home to more than three-quarters of Europeâs derivatives trading.
George Osborne, UK chancellor, is insisting that European Union finance ministers next week continue to debate new requirements for clearing derivatives, in spite of his counterparts making clear that London is alone in opposing the package.
Mr Osborne is expected to break from next weekâs Conservative party conference in Manchester and travel to Luxembourg to seek a reprieve over the derivatives regulation, as well as press his European colleagues for action on the eurozone crisis and fight a proposed financial transaction tax that would hit trades that are overwhelmingly routed through the City of London.
The looming defeat over the planned derivatives rules is heightening British concerns â both in government and in the City that the UK is increasingly isolated in Brussels, just as a wave of financial regulation enters the EU legislative pipeline with far-reaching implications.
But in a heated meeting of EU ambassadors, Britain warned that rejecting its views on a London-based industry would have âconsequencesâ, not least in enraging eurosceptics in Westminster calling for Britain to reclaim powers from the EU.
