IGTA Journal - Summer 2018

And if my colleague, Brian Bussey from US Commodity Futures Trading Commission (CFTC), stresses that a lead supervisor is crucial, but says the US has more interest in LCH than anyone else in the world, then I think we are already back in third place. Given the CCP’s systemic importance for the euro area, this would be unacceptable. The ECON Committee of the European Parliament has recently taken an initial stance regarding migration – and here, too, the possibility of relocation continues to play a major role. For us at the Bundesbank, this is not a matter of structural policy or trade issues. We are competitively minded and neutral. Our mandate is to safeguard price and financial stability, and these decisions affect this stability in a major way. These policy stances already stake out a clear, transparent framework of expectations in the SSM. 4 The future of Europe as a financial centre Ladies and gentlemen, as much as we greatly regret the United Kingdom’s decision to leave the EU, we must nonetheless look forward and consider how financial services can be delivered in the European Union in the future. First, we need to observe the consequences of Brexit from the perspective of each individual bank. Banks have so far avoided making any major changes, not least because they are also busy coping with large-scale acute challenges and their financial implications. So it is easy to lose sight of strategic issues. It’s not just Brexit that’s shifting the tectonic plates under banking – digitalisation and regulation are two other key drivers of change. When traditional structures and markets are broken up this way, the cake will be redivided – some will lose out, but some will get a bigger slice. There is a real danger that adhering at all costs to traditional positions in London risks missing out on new opportunities in the EU – though not by everybody: those who don’t will be the winners. So I would urge you not to lose sight of medium and long-term strategic options. Second, we also have to consider the repercussions of Brexit in terms of its impact on the EU financial market as a whole. What we are looking at here is nothing less than the financing of the European economy, especially at a time when the global economic and financial order is becoming increasingly shaky. Earlier EU initiatives – the single financial market, the banking union, and the capital markets union – all had an inward focus. And with London, Europe had an international financial centre. This will now change. Hence the question of whether we in the EU 27 should aspire to developing a globally competitive financial centre that is more than the sum of its parts here in Frankfurt, Paris, Amsterdam or Dublin. François Villeroy de Galhau, the governor of the Banque de France, recently spoke of an integrated network with centres specialised in various activities – and I am thinking along the same lines, which include major efforts to harness digital potential as well. I would like to help kick off a broad, forward-looking debate surrounding the concept of a digital financial centre of Europe. It’s an idea based on three pillars. IGTA eJournal | Summer 2018 | 25