Clearing Houses Case Study

The European Union was established as an economic and political partnership between 28 European Countries (European Union, 2015). The UK has been stayed in the EU for over four decades from 1973 to now. In 1975, Labour Prime Minister Harold Wilson had ever held a referendum on Britain’s membership in the EU and the voting result is to stay in the European Community. Recently, the article (BBC NEWS, 2015) reported that the UK has a plan to hold the second referendum by the end of 2017 to decide whether or not the UK should stay in or leave the European Union. This might be a significant referendum that may bring lots of impacts on the UK’s economy.

Investors operating inside Britain, will not have access to the EU Single Market, but would face tariff barriers and higher trade costs. Therefore, the rate of foreign investors investing in Britain would likely decrease. Some businesses currently operating in Britain will choose other countries for their businesses. Many international and national organizations have decided to leave Britain after Brexit, even some of the organizations decided to abandon Britain after the referendum. The New York Times Editorial Board (2017) asserts that “Bank of America had chosen Dublin as its future European Union hub, joining Citigroup and others in making contingency plans for the day when London loses the ‘passporting’ privileges.” Consequently, in addition to negatively affecting the economy of Britain, many British will lose their jobs and job opportunities available for

The two prevailing opinions regarding the European Union are that the United Kingdom should either withdraw from the EU or renegotiate to give the UK greater independence from it. These views are not in keeping with the increasingly globalised and international nature of society and are based largely on myths and misinformation.

After the United Kingdom’s (UK) decision to leave the European Union (EU) there has been numerous questions and uncertainty of how this will impact the British economy and its trade market. By enlarge the majority of large businesses argue that it will have a negative impact and consequently have backed out of protentional new investments in the UK because of this uncertainty. An example of this is Lloyd’s of London who have axed plans for a new sharing worth potentially 9 billion pounds due to post- Brexit instability. This may also be the case for many large businesses until the leave is complete and the economy is once again stable. However, it can also be argued that Brexit may very well lead to new trade opportunities outside of

Dr. Clark: I am writing this brief policy memo in regard to the recent monetary crisis involving certain European countries, namely Greece and Spain. The focal organization handling the issue is the EU (European Union). The EU was established on November 1, 1993 by the treaty of Masstricht. It developed a single, regionalized, market structure through a system of standardized laws that apply in each member state so that citizens, goods, capital, and services are regional rather than local. With the establishment of a common currency, the Euro, the EU is also concerned with the overall economic and fiscal health of each member country. EU banks oversee localized financial institutions, and have the legal authority to enact localized changes in order to keep currency balanced. There are also branches of the EU that focus on legal and foreign policy issues, which sometimes blend into the economic realities of globalism (Europa, 2009). The EU acts as much more than an economic modifier, though, and member nations are encouraged to participate in cultural sharing (music, the arts, etc.), religious tolerance, and of course sport. This changes the overall rubric of the EU in that it actively seeks out foreign trade and markets as a large regional economic sector, so successfully that it counts for approximately 30 percent of world trade output (The EU Single, 2009).

According to Reuter Magazine, “ The bloc will also seek to ensure Britain adheres to EU rules - including any changes - during transition, and the possible avenue

For individual speculators and the managers of financial firms, they have incentives to increase profit where they prefer more risk investment when counterparties and others obey the rules to keep a sustainable marker. Therefore, the transparency policy had been implemented to expose more information around prices and volumes combined with the standardising policy of derivatives contracts, which also increase market efficiency and liquidity. The main regulations introduced are as follows:

Also threatened would be London’s status as Europe’s major financial center, home (for example) to 78 percent of E.U. foreign exchange trading. With the U.K. out of the E.U., some banking activities might move to Frankfurt or other cities. This would be a big blow.

In another situation that could be looked at, it is not an automatic yes for the European Economic Area to take the UK in, they might also not be as lucky like the other non-EU countries that have been granted bilateral terms a good example will again be Switzerland. From the situation of brexit, the UK considered less attractive to overseas investors. As a result, this in turn means city like Paris and Frankfurt will take advantage in the situation and try to claim as much share of the advantageous markets to better their financial services. The question that is in the air is will brexit deplete the UK financial services sector because of all the harsh and sever EU regulations. For his situation is very unlikely because the domestic home based organisations will still need to accept these regulations for all other EU transactions. However, with brexit getting more certain and sable for the UK financial market another question will be to know if the EU regulations for the UK would be a big burden for their transactions outside the EU as financial regulations are still developing. It can be difficult to put a monetary value on the impact of the regulations of brexit. It will be very likely that not all these regulations would put the home based organisations in UK at a competitive disadvantage, as the EU is the world’s largest financial service exporter, besides, making a great amount of the world’s financial services

With MiFID emphasizing on best execution of trades across trading venues and the emergence of Multilateral Trading Facilities, (MTFs), competition between trading venues increased. As a natural progression of this, competition emerged in the post trading area amongst CCPs and CSDs to provide clearing and settlement services to trades executed on the new trading platforms. EMIR provided a further impetus to this by setting out common rules for CCPs, enabling recognized CCPs to offer their services across the

Trade is one of the factors that is facing a lot of uncertainty because of Brexit. More than half of all UK trade is with the European Union, which amounts to approximately 15% of their national

While Eurozone policy manufacturers were debating whether or not bailouts square measure black, at an equivalent time there have been some ambiguities regarding ECB 's application of the minimum credit rating threshold within the collateral eligibility necessities for the needs of the Eurosystem 's credit operations within the case of marketable debt instruments issued or warranted by the Greek Government. These ambiguities created uncertainty for money establishments and investors holding Greek Government bonds.

Brexit could alter the dynamics of the relationship with the rest of the world as the EU is one of the world’s largest markets comprising of £11 billion worth of trade stemming from its advanced technologies and highly skilled & educated workforce (Baldwin and Lopez-Gonzalez, 2015).

A chronological sequence of events was pre-announced for the changeover to the euro. This scenario was mainly based on detailed proposals elaborated by the EMI

European monetary union has replaced national currencies with a single currency, the euro to eliminate exchange rate variability among eurozone member countries. The European Central Bank manages the European currency the euro, whose primary objective is price stability, defined in practice as involving inflation less than 2 percent. A series of fiscal rules were (unsuccessfully) adopted to prohibit the bailouts of member states from the eurozone.