LONDON (Reuters) - France’s banking industry body wants a new European Union law that would force non-EU banks to shift swathes of euro derivatives clearing from the City of London to Frankfurt, people familiar with the matter said. Since Britain fully left the European Union in December the City of London finance industry has lost access to its biggest market and trading in euro shares and swaps have moved to the EU. Brussels is now targeting euro clearing and last week began a fact-finding mission by meeting with banks. Sources told Reuters that the French Banking Federation (FBF) does not believe it would work if non-EU banks were asked voluntarily to move trillions of euros in interest rate swaps positions from the London Stock Exchange"s LSE.L LCH clearing arm to the bloc. The FBF had no immediate response. LCH clears around 90% all euro swaps, but only a quarter of the 83 trillion euros total are held by EU counterparties. The FBF believes that forcing relocation of just this EU portion would undermine efforts to deepen EU capital markets, the sources said. Existing EU legislation only gives the bloc’s regulators a say over the swaps positions held by EU counterparties. The FBF wants a new EU law to make possible “forced relocation” of euro clearing by non-EU banks, the sources added. Andrew Bailey, governor of the Bank of England, which regulates LCH, said last week he would resist “very firmly” any attempt to force non-EU banks to relocate clearing from London to the bloc. The French industry body also wants a “roadmap” combining such new legislation and other steps to relocate euro clearing by force, the sources said. This would be aligned with efforts by Deutsche Boerse’s Eurex clearing arm in Frankfurt to broaden its service. The FBF has suggested a phased approach to relocation, starting with short-term interest rate swaps, the sources said. The FBF believes that markets would need at least a year to implement a roadmap before the end of LCH’s “recognition” or permission to continue clearing for EU customers. LCH currently has permission from Brussels to clear EU clients on a temporary basis until June 2022, but the LSE has said it is hoping to obtain long-term access.