The European Commission has recommended that EU banks be allowed to continue to access London’s euro clearing houses for a further 18 months after the end of the Brexit transition period on December 31 this year.

The Financial Times has reported that it has seen a seven-page document published by the EC that calls on national governments to approve the decision.

The Commission is concerned that without the extension there would be hiccups, as London dominates euro clearing operations with about 90 percent market share of euro-denominated interest rate swap trades.

The 18-month breathing space would also allow EU banks to reduce their reliance on UK facilities in the hope that Europe can develop its own infrastructure.

The frosty state of UK-EU trade negotiations has concentrated minds, at least on the European side of the Channel.