JPMorgan Chase snubs Clearstream for Euroclear

JPMorgan Chase snubs Clearstream for Euroclear

JPMorgan Chase has expressed its displeasure at the proposed takeover of Clearstream by Deutsche Borse by publicising plans to shift all of its European custody business to arch-rival Euroclear.

A spokesperson for the bank says the move has been prompted by a number of factors, including efficiency gains and JPMorgan Chase's support for a horizontal structure for European clearing and settlement.

The decision is a major blow for Clearstream and a damning verdict on its vision of creating a single, vertically-integrated European clearing and settlement structure through a merger with Deutsche Borse. While JPMorgan has a longstanding relationship with Euroclear, Chase was one of Clearstream's biggest clients. Informal estimates put the value of JPMorgan Chase's European assets at EUR150 billion.

The big investment banks who operate in the European securities and bond markets are known to favour a merger between Clearstream and Euroclear as the optimum method for reducing the costs of clearing and settlement in the European markets.

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