London Stock Exchange buying £385m of British clearing house LCH in vote of confidence for London after Brexit
The London Stock Exchange is buying £385m of British clearing house LCH in a vote of confidence for London after Brexit.
LSE is snapping up 15.1 per cent of LCH, taking its stake to 80 per cent.
Clearing houses have become a vital part of the financial system since the crash a decade ago.
Swoop: The London Stock Exchange is snapping up 15.1 per cent of LCH, taking its stake to 80 per cent
They handle complex derivatives trades between banks and are meant to reduce the risks of a massive shockwave across the market if one lender goes bust.
Firms selling down their stakes to LSE include Turkish exchange Borsa Istanbul, German lenders Commerzbank and Deutsche Bank, and US market Nasdaq. The remaining 20 per cent of LCH will still be controlled by 14 banks and other financial institutions.
Banks on the Continent use London clearing houses for the vast majority of their trades, making it a political football in Brexit negotiations. The European Union had threatened to ban its banks from relying on the City. But Brussels backed off due to concerns over financial stability.
LSE said profits rose to £465m in the three months to September 30, up 8 per cent on a year earlier.