Major banks on the Continent will be able to carry on using London for £60 trillion of crucial trading activity

Major banks on the Continent will be able to carry on using London for £60 trillion of crucial trading activity even if there is a No Deal Brexit.

Large lenders inside the European Union have been given permission by Brussels to continue accessing so-called clearing houses in the City for a year after we leave.

These clearing houses allow banks to trade complicated derivatives which underpin vital lending to households and businesses.

Banks based inside the EU are legally only allowed to use clearing houses within the bloc – and it was feared a No Deal Brexit would cut them off from London, the main hub for clearing, causing chaos.

Derivatives contracts worth as much as £60 trillion were thought to be at risk, affecting huge lenders such as Deutsche Bank.

But the European Securities and Markets Authority has given EU banks permission to keep trading in the UK for 12 months after Brexit even if there is no deal.

Finbarr Hutcheson, president of ICE Clear Europe, welcomed the decision. He said: 'It removes the uncertainty.'