RBI-ESMA logjam: Banks turn to EU, UK regulators over trade impact concerns

Banks expressed concerns about trade impact, disruptions seen in OIS, bond markets

European banks with operations in India are in the process of making representations to regulators in their own countries to express concerns about potentially large trading disruptions that would be caused by the European regulator’s decision to withdraw recognition of the Clearing Corporation of India (CCIL).

The European Securities and Markets Authority (ESMA) in late October de-recognised six Indian clearing houses, including the CCIL, which hosts the trading platform for government bonds and overnight indexed swaps. The decision is said to have been taken after the Reserve Bank of India’s (RBI’s) refusal to permit the foreign regulator rights of audit