Euro swaps clearing showdown pits banks against Brussels

Forcing swaps clearing to Frankfurt would play into hands of US rivals, say European dealers

Power brokers in the corridors of Brussels are sharpening their weapons as the fight for control of the $90 trillion euro-denominated swaps clearing business intensifies. Officials in the European Union, long irked that most euro swaps are cleared at London’s LCH, are pressuring banks and buy-side firms to shift contracts to Frankfurt’s Eurex.

Their persuasion tactics range from constructive engagement to veiled threats. In response, banks are warning law-makers that a forced migration of swaps