By Ben Jones, ReutersThe British banking industry is expected to be among the first to benefit from the US Federal Reserve’s decision to lift the capital requirements for foreign exchange transactions to allow them to trade on the London Stock Exchange.
The move comes after the British government’s decision last year to impose capital requirements on foreign currency transactions.
The new rules will apply to foreign exchange contracts for purchases and sales on or after April 1, 2019.
In a statement, the Reserve Bank of New York said that the move “should provide support for the UK economy” and the UK was a “leading participant in global financial markets” and a “highly competitive financial centre.”
It also said the capital requirement should allow for foreign currency markets to “improve faster” as they seek to cope with the global economic crisis.
The UK has been a leading participant in international financial markets since the 2008 financial crisis.
Its largest bank, HSBC, and Royal Bank of Scotland have both agreed to reduce the capital needs of their foreign exchange trades.
HSBC’s head of foreign exchange for the US, Jim Dowd, told Reuters in an interview that the decision was “a positive thing for us as a company and a positive thing to do for the market.”
The bank has a total of about $3 trillion in foreign currency assets in the US.