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Connecting and disconnecting critical financial market infrastructures : oversight and regulation of CCPS after Brexit

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Franklin ALLEN, Elena CARLETTI, Joanna GRAY and Mitu GULATI (eds), The changing geography of finance and regulation in Europe, Florence : European University Institute; London : Brevan Howard Centre at Imperial College; Milan : Baffi Carefin, Bocconi University, 2017, pp. 141-151
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SMOLENSKA, Agnieszka, Connecting and disconnecting critical financial market infrastructures : oversight and regulation of CCPS after Brexit, in Franklin ALLEN, Elena CARLETTI, Joanna GRAY and Mitu GULATI (eds), The changing geography of finance and regulation in Europe, Florence : European University Institute; London : Brevan Howard Centre at Imperial College; Milan : Baffi Carefin, Bocconi University, 2017, pp. 141-151 - https://hdl.handle.net/1814/65740
Abstract
Much like physical infrastructures such as roads or gas pipes connect scattered geographical locations, the EU’s fnancial system is connected through market infrastructures (FMIs), entities which operate as nodes linking market actors, buyers and sellers of fnancial products, of which central counterparties (CCPs) are a prominent example. Barriers erected in the afermath of Brexit will interrupt all these infrastructures – both physical and virtual. However, in the context of fnancial markets, the issue of free movement was already raised before the UK referendum in the context of ECB’s so-called “Location Policy”, challenged by the British government before the EU courts. Brexit in itself will not resolve the issues related to ECB competence and EU’s internal market. In fact, in 2017, the perfect storm brought about by Brexit, the revision of EU’s fnancial market infrastructure regulatory framework (EMIR) and the general extension of central bank prerogatives in terms of fnancial stability objectives will force a profound re-examining of the trafc rules on European fnancial infrastructures, in particular from the perspective of a (multi-currency) internal market and principles of EU law.