Brexit Swap-Market Disruption Averted by EU Access to London (1)

The European Union gave banks in the bloc 18 months to continue using crucial financial infrastructure in the U.K. after the Brexit transition period to avoid massive market disruption.

The European Commission in Brussels said granting firms continued access to derivatives clearinghouses in Britain is justified because a sudden severance of ties could threaten financial stability. Temporary access will cease at the end of June 2022.

The decision, which has been signaled in recent weeks, “gives EU market participants the time they need to reduce their excessive exposures” to U.K.-based clearinghouses, Valdis Dombrovskis, an executive vice president of the ...