Joint Statement by Riksbank and Bank of England on continuity of the effective oversight cooperation in relation to LCH Ltd

The Riksbank and the Bank of England (BoE), both Central Banks of their respective countries, have published a joint statement in which they committed to effective cooperation as regards the oversight of London Clearing House Limited (LCH), a London-based clearing house which is no longer subject to EU oversight since the UK left the Union. The BoE, as the supervisor of central counterparties (CCPs) such as LCH, thereby emphasizes its efforts to ensure LCH’s resilience and efficient functioning, especially recognizing its systemic importance. Such efforts are even more so important since the introduction of the Financial Services and Markets Act which obligates the BoE to consider the impact of its policies on financial stability in other jurisdictions as well.
For the Swedish market, LCH plays a critical role in clearing SEK-denominated interest rate swaps and other financial instruments. Strong cooperation and information sharing between the Riksbank and the Bank of England, along with robust regulation and supervision of LCH, are essential for preserving financial stability in Sweden.
To conclude, both institutions emphasize the importance of cooperation in maintaining stable financial market infrastructures, facilitating global financial market participation, and avoiding fragmented markets. They view this joint statement as a testament to their commitment to international standards of cooperation and deference between regulatory authorities.