Osborne: UK needs top clearing technology for China's renminbi currency

Chancellor George Osborne has vowed that the UK will have the top clearing and settlement technology for the Chinese renminbi currency.

In a sign of the growing interaction between Western and Chinese financial markets, Osborne has signed a major co-operation deal with the Hong Kong Monetary Authority - with a promise to investigate and develop the supporting systems needed. The deal is seen as particularly important given the UK's isolation at a recent EU financial summit.

Both the HKMA and the UK Treasury have already set out the basic IT measures needed to enable brokers and other businesses to trade the currency in London.

In a major step, the HKMA has agreed to extend the running hours of its renminbi payments system by five hours in order to make it available until 3.30pm UK time, covering most of the London trading day. The change will take place this June.

But more specific details remain to be defined on how standardised clearing and settlement systems will be set up between the countries.

Osborne and Norman Chan, chief executive at the HKMA, (pictured together) are establishing a forum to investigate the technology needed to support current and future renminbi financial products. Forum members include HSBC, Standard Chartered, Bank of China, Deutsche Bank and Barclays, and the first meeting is in Hong Kong this May.

"London is perfectly placed to act as a gateway for Asian banking and investment in Europe, and a bridge to the US," Osborne said.

Copyright © 2012 IDG Communications, Inc.

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