(Bloomberg) --

The European Union has started a consultation on how to make the bloc’s clearinghouses more attractive, the latest move in a multi-year attempt to draw more of the business away from the City of London after Brexit.

The European Commission will outline proposals in the second half of the year designed to build capacity and liquidity in EU clearinghouses, the EU’s executive arm said as it launched the public consultation on Tuesday. The Commission will also seek to strengthen the role of European regulators over the industry.

“Central clearing parties play an important tole in mitigating risk in the financial system,” Commissioner Mairead McGuiness said in a statement. “The Commission plans to come forward with measures to reduce our excessive dependence on systemic third-country clearinghouses and to improve the attractiveness of EU-based clearinghouses.”

The move comes as the Commission formally adopted a decision to extend a temporary waiver that allows its banks and money managers to clear trades in the U.K. through to June 2025. The extension is a tacit acknowledgment by the bloc that City of London clearinghouses remain essential to its financial infrastructure, a reliance the EU is looking to reduce.

The are some signs activity in the bloc is picking up. Frankfurt-based Eurex Clearing AG saw record volumes in euro clearing in January, with average daily cleared volumes in OTC interest-rate derivatives growing to 276 billion euros ($315 billion), parent company Deutsche Boerse AG said in a statement Tuesday. But that’s still a fraction of the amounts cleared in London.

Clearing is a key part of the finance world supporting banking, technology and legal jobs across the City of London. Clearinghouses such as the London Stock Exchange Group Plc’s LCH operate at the center of markets, collecting collateral from both sides of a trade to ensure a default on one doesn’t spread panic through financial markets.

©2022 Bloomberg L.P.