London’s pre-eminence as a global financial powerhouse has often been brought to attention throughout the Brexit debate. The capital plays a pivotal role in the UK, European and global economy – it continues to be a hub and there is an overriding consensus that this must remain the case.

London is the home of numerous reputable clearing houses – which are responsible for facilitating the exchange of international payments. LCH, the London based clearing house, plays an integral part in euro-denominated worth $836.6bn and $1.76 trillion in dollar-denominated contracts. Additionally, there are opportunities beyond Europe as the UK is vital in the trading of multiple other currencies: Swiss, Australian, Canadian and around £46bn of Japanese Yen.

Recently, concerns have arisen over the implications for the trillions of pounds’ worth of contracts that could be unaccounted for in the event of a no deal Brexit. Yesterday, the Association for Financial Markets in Europe, an organisation that campaigns for the continents largest banks, penned a public letter to the European Commission’s head of financial stability, calling for the “urgent need…to address risks to financial and market stability” if Britain is to leave the EU with no deal.

As the UK works tirelessly to prepare for all scenarios, the EU seems reluctant to reciprocate these efforts. The Bank of England, recognising the importance of the UK, has implored European authorities to show willingness in finding a solution. Despite these warnings, in the move that could see mutually-destructive outcomes, the EU has threatened to transfer the principal clearing houses from London to a continental location.

The EU has attempted to use this issue as leverage within negotiations – misunderstanding the complexity of how Europe’s financial sector operates and the significant role that London plays. These developments are yet another example of the EU’s stubbornness to avoid compromise.