General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
November 10, 2017

Yves Mersch, Member of the Executive Board of the ECB, spoke at the Cumberland Lodge Financial Services Summit in Windsor. He discussed the evolving regulatory environment for central counterparties (CCPs). EC's June 2017 proposal to amend European Market Infrastructure Regulation (EMIR) framework for the supervision and regulation of EU and third-country CCPs has been the most notable development, according to Mr. Mersch,

The strengthening of the role played by the central banks is necessary in light of two major trends of the past few years. First, since EMIR first entered into force, there has been a continued growth of central clearing and the resulting financial risk concentration in CCPs. This has significantly increased the potential disruptive effects that CCPs can have on the implementation of monetary policy. Second, the departure of UK from the EU implies that a very large part of euro-denominated clearing activities across all asset classes may be performed from outside the EU in the future. This points to the need to strengthen the EU regime for third-country CCPs and to enhance the role of the relevant central banks of issue. He explained that it is also fully justified to seek to strengthen the supervisory regime for CCPs, Taking the example of third-country CCPs, Mersch explained, "Until now, the EU's approach towards third country CCPs, including those that are of systemic importance, has been to rely entirely on the supervision carried out by home authorities. However, there are certain areas in which EU rules provide more protection than those in other jurisdictions, and in these areas the EC is right to suggest that reliance on home authorities may not be enough, and that more direct involvement by EU authorities is required."

ECB would be involved in the process to share its liquidity considerations as a monetary policy authority, but the final supervisory decision would be within the hands of the EC and the EU legislators. Mr. Mersch also focused on the issues related to financial market infrastructures (FMIs), which arise from Brexit. "The withdrawal of the UK from the EU will, needless to say, create legal uncertainty not only for CCPs but, also, for other FMIs, including payment and securities settlement systems processing euro-denominated transactions. These issues need to be carefully monitored and assessed, and solutions may need to be explored in order to ensure certainty and stability." He concluded that various legislative initiatives are crucially important in the current context and said: "We strongly welcome the intention of the legislator to give central banks of issue a role in the regulatory framework for CCPs, commensurate with their responsibilities. As I have said, this is of crucial importance, considering the fundamental impact CCPs can have on monetary policy."


Related Link: Speech (PDF)

Keywords: Europe, Banking, Securities, CCP, EMIR, ECB

Related Articles

FDIC Consults on Approach to Resolution Planning for IDIs

FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans.

April 22, 2019 WebPage Regulatory News

EP Resolution on Proposal for Sovereign Bond Backed Securities

The European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS).

April 16, 2019 WebPage Regulatory News

HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5%

HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%.

April 16, 2019 WebPage Regulatory News

EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2

The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks.

April 16, 2019 WebPage Regulatory News

PRA Finalizes Policy on Approach to Managing Climate Change Risks

PRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix).

April 15, 2019 WebPage Regulatory News

PRA Seeks Input and Issues Specifications for Insurance Stress Tests

PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019.

April 15, 2019 WebPage Regulatory News

EBA Single Rulebook Q&A: First Update for April 2019

EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week.

April 12, 2019 WebPage Regulatory News

FED Updates Form and Supplemental Instructions for FR Y-9C Reporting

FED updated the form and supplemental instructions for FR Y-9C reporting. FR Y-9C is used to collect data from domestic bank holding companies, savings and loan holding companies, U.S intermediate holding companies, and securities holding companies with total consolidated assets of USD 3 billion or more.

April 11, 2019 WebPage Regulatory News

EIOPA Statement on Application of Proportionality in SCR Supervision

EIOPA published a supervisory statement on the application of proportionality principle in the supervision of the Solvency Capital Requirement (SCR) calculated in accordance with the standard formula.

April 11, 2019 WebPage Regulatory News

ISDA Publishes Statement on FRTB Implementation in Emerging Markets

ISDA published a statement that outlines challenges in implementation of the new Basel III market risk standard for banks in emerging markets.

April 11, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2929