Switzerland wants to become an offshore yuan trading centre in Europe, competing with Frankfurt and London to corner trade in China’s currency. […] While no official talks have taken place, Schneider-Ammann said he hoped the idea would become “more serious” in the coming weeks or months. London, the centre of the world’s USD 4 trillion-a-day market for foreign exchange trading, claims to have the edge in Europe after the Bank of England signed a three-year currency swap line with the People’s Bank of China last month. A group representing Frankfurt’s financial industry predicted last week that the European Central Bank would get a swap deal that would allow it to exchange euros for as much as RMB 800 billion (HKD 1.01 trillion) – four times the size of the Bank of England agreement. To have a trading hub, a central bank must have an agreement with the PBOC to swap its currency for yuan. This gives a central bank access to yuan funds to back up firms doing business with Chinese partners.
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