Clearstream bids to avert UBS defection

Clearstream bids to avert UBS defection

The Financial Times is reporting that Clearstream is seeking to reassure UBS about the implications of its forthcoming merger with Deutsche Borse, amid speculation that the giant Swiss bank may be about to switch its clients' assets to a rival clearing house.

Clearstream and UBS were holding discussions late yesterday to discuss the bank's position, states the FT.

The loss of UBS, one of Clearstream's biggest clients, would be a serious blow for the Luxembourg-based clearer. It would follow the planned defection of JP Morgan Chase to rival Euroclear - a move sparked off by Clearstream's rejection of a merger with Euroclear in favour of a full-scale takeover by Deutsche Borse.

Europe's leading investment banks are understood to support horizontal integration between Euroclear and Clearstream as the best way to reduce cross-border trading costs.

A spokeswoman for UBS told the FT: "UBS is a leading supporter of moves to create a genuine pan-European capital market with ownership and control of clearing and settlement seperate from exchanges, and is a founder member of the European Securities Forum, which campaigns for reform."

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