Brussels has set out plans to give itself wide-ranging powers over clearing houses based outside the European Union, including the ability to force firms to move from London to inside the bloc. The politically-charged move comes days before Brexit talks are due to begin.

The supervision of clearing houses is one of the most heated debates to have emerged since the UK voted to leave the EU last June. London is home to clearing houses that dominate clearing of euro-denominated derivatives, a lucrative business that is critical to the health of both the financial sector and the real economy.