The Deutsche Bundesbank welcomes the decision by the People's Bank of China (PBoC) to designate Bank of China as the renminbi clearing bank for the Frankfurt financial centre. "The nomination of Bank of China is another milestone on the road towards creating a renminbi trading centre in Frankfurt," Dr Joachim Nagel, Member of the Bundesbank’s Executive Board and responsible for the Markets Department, explained. It is crucial for a clearing bank to be an active player in European and Chinese payments business, to have a strong network and to boast a long track record in China and Europe, he added. "Bank of China meets these criteria and will be a valuable partner for all market participants," Dr Nagel continued, "now it’s up to the banks in the euro area to make the most of this new facility in the Frankfurt financial centre."

In March, on the occasion of Chinese President Xi Jinping’s visit, the PBoC and the Bundesbank signed a memorandum of understanding regarding the clearing and settlement of payments denominated in the Chinese renminbi in the Frankfurt financial centre. The nomination of a clearing bank means that it will be possible for renminbi payments to be cleared directly, eliminating the costly need to route them via other financial centres. The PBoC will allow the clearing bank to access onshore RMB liquidity and its payment system. The Bundesbank will provide the clearing bank with the technical and operational support it needs during the development phase in conformity with its public mandate.