By Huw Jones
LONDON, Dec 11 (Reuters) - Derivatives trading worth $200
billion a day faces disruption from European Union curbs and
customers too slow to move business from London before full
Brexit, the Bank of England said on Friday.
Britain's access to the EU in financial services is being
dealt with by Brussels separately from stalled negotiations that
increasingly point to a no-deal Brexit on Dec. 31.
The EU has said that banks in the bloc must trade
euro-denominated shares and a welter of derivatives inside the
bloc from January.
"Some business, as a result of that, will need to transfer.
The question is, is the market ready, have people made the right
preparations for that," Bank of England Deputy Governor Jon
Cunliffe told reporters.
"There may be some who are unprepared and in many cases
there are other routes for them, but it's impossible to know
unless and until we get there exactly what the impact will be,"
Cunliffe said.
Share-trading platforms in London have opened units in the
bloc to trade euro-denominated shares, but banks warned on
Thursday that disruption in derivatives was inevitable unless
the EU granted market access to Britain before January.
Around $200 billion of daily trading in interest rate swaps
in London, or roughly a sixth of the total, will be affected by
"obligations" on where trading can take place, the BoE said.
Britain, however, has so far refused to soften its own
obligation on UK-regulated banks to use derivatives platforms in
London, making trades between UK and EU counterparties
impossible.
But Bailey said the BoE has spent a lot of time mitigating
potential disruption and avoiding market "roadblocks", without
matching action from Brussels.
The BoE's full "armoury" will be at hand to deal with any
market disruption in January, Bailey said.
The EU's financial services chief said this week the bloc
needed to cut its reliance on the City of London.
"London is a global financial centre, has been for a very,
very long time, and will continue to be so," Bailey said.
(Reporting by Huw Jones, editing by Larry King)