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Bank of England names London Chinese currency clearing hub | Bank of England names London Chinese currency clearing hub |
(about 1 hour later) | |
The Bank of England has appointed one of China's "big four" banks as the Chinese currency clearing bank in London. | The Bank of England has appointed one of China's "big four" banks as the Chinese currency clearing bank in London. |
The China Construction Bank will be the London renminbi clearing house. | The China Construction Bank will be the London renminbi clearing house. |
The appointment is part of a plan to make London a hub for Chinese currency dealing. | The appointment is part of a plan to make London a hub for Chinese currency dealing. |
Standard Life chair Sir Gerry Grimstone said renminbi trading is the most important issue facing the City of London at the moment. | Standard Life chair Sir Gerry Grimstone said renminbi trading is the most important issue facing the City of London at the moment. |
In March, the Bank of England signed a memorandum of understanding with the People's Bank of China setting out the deal. | In March, the Bank of England signed a memorandum of understanding with the People's Bank of China setting out the deal. |
The banks have said they want to encourage the cross-border use of renminbi, or yuan, to rebalance the global economy. | The banks have said they want to encourage the cross-border use of renminbi, or yuan, to rebalance the global economy. |
Bank of England governor Mark Carney said the appointment was an "important milestone", because the Chinese bank would "play a valuable role in facilitating greater use of the RMB [renminbi] for trade, investment and other economic activities in the UK". | Bank of England governor Mark Carney said the appointment was an "important milestone", because the Chinese bank would "play a valuable role in facilitating greater use of the RMB [renminbi] for trade, investment and other economic activities in the UK". |
Mr Grimstone, who chairs financial services trade body TheCityUK and Standard Life, helped broker the memorandum. | Mr Grimstone, who chairs financial services trade body TheCityUK and Standard Life, helped broker the memorandum. |
He said the deal could help to secure City jobs for decades. | He said the deal could help to secure City jobs for decades. |
"We're moving down a track very rapidly where London is going to become... the offshore centre for trading renminbi," he told the BBC. | "We're moving down a track very rapidly where London is going to become... the offshore centre for trading renminbi," he told the BBC. |
Two-thirds of Chinese currency traded outside of China is already done in London, he added. | Two-thirds of Chinese currency traded outside of China is already done in London, he added. |
On Tuesday, Prime Minister David Cameron announced that trade deals worth more than £14bn had been signed during a state visit by Chinese premier, Li Keqiang. | On Tuesday, Prime Minister David Cameron announced that trade deals worth more than £14bn had been signed during a state visit by Chinese premier, Li Keqiang. |
Mr Li said the yuan clearing house deal "will further consolidate and promote London's status as an international financial hub" and help "promote trade and investment liberalisation and facilitation". | Mr Li said the yuan clearing house deal "will further consolidate and promote London's status as an international financial hub" and help "promote trade and investment liberalisation and facilitation". |
During Mr Li's visit, the London Stock Exchange (LSE) said that it had signed agreements with two of China's biggest banks to develop UK renminbi trading. | During Mr Li's visit, the London Stock Exchange (LSE) said that it had signed agreements with two of China's biggest banks to develop UK renminbi trading. |
The LSE deal with the Bank of China will see the two firms design clearing and financing processes for financial products. | The LSE deal with the Bank of China will see the two firms design clearing and financing processes for financial products. |
The deal with the Agricultural Bank of China is designed to help ease access to capital for Chinese companies. | The deal with the Agricultural Bank of China is designed to help ease access to capital for Chinese companies. |
Last year, China opened its markets to UK-based investors, letting London-based asset managers invest directly in Chinese stocks and shares in yuan. | |
A 200bn-yuan currency swap arrangement allows firms to settle trades directly in pounds and yuan rather than through US dollars. | |
In March, the private-sector arm of the World Bank, the International Finance Corporation, issued a 1bn-yuan bond in London, the first by an international financial institution. |