Britain will sue the European Cental Bank to prevent it from implementing a new policy that would drive London’s financial services sector to the Continent, according to the FT.
The new policy is part of what the report calls a “turf war” with Germany and France, who seek to move financial clearing houses to Frankfurt or Paris.
From the FT:
An ECB policy paper, released in the summer, requires clearing houses to be based in the eurozone if they handle more than 5 per cent of the market in a euro-denominated financial product.
Britain will ask the courts to strike down the rule on the grounds that it restricts the free movement of capital and infringes on the right to establish cross-border businesses across a multicurrency European Union.
The ECB has argued that this policy will streamline handling of euro crises, as multiple central banks with conflicting interests could slow policy action.
It is unclear how soon the European Court of Justice would rule on a suit, which is to be filed “imminently,” according to the FT report.
Further integration measures that may be implemented during the raging eurozone crisis could complicate Britain’s suit.
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