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ECB launches review of its monetary policy strategy

January 24, 2020

ECB, monetary policy

Review will encompass quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices Other considerations, such as financial stability, employment and environmental sustainability, will also…

Central banks to assess potential cases for digital currencies

January 21, 2020

News and Notes – Fintech

Bank for International Settlements, Bank of Canada, Bank of England, CBDC, ECB, Sveriges Riksbank, Swiss National Bank

The central banks of Canada, UK, Japan, Europe, Sweden and Switzerland, together with the Bank for International Settlements (BIS), have created a group to share experiences as they assess the…

Variable €STR volumes make us wonder about other European benchmarks (Premium)

January 20, 2020

ECB, ESTR, Europe, Interest rates, SONIA, UK

€STR, Benchmarks, ECB, SONIA, topstory

Volumes in €STR, the European Central Bank reference rate launched in October 2019, have been variable since the launch. Although the initial expectation was that €STR would see 36,000 transactions…

ECB: how central banks can absorb liquidity risk from shadow banking

January 6, 2020

Central Banks, ECB, Shadow Banking

ECB Working Paper Series Unconventional monetary policy and funding liquidity risk No 2350 / January 2020 This paper investigates the efficiency of various monetary policy instruments to sta- bilize asset…

ECB exploring anonymity in central bank digital currencies

December 19, 2019

News and Notes – Fintech

CBDC, data privacy, ECB

Under the coordination of the ECB, the European System of Central Banks (ESCB) has established a proof of concept for anonymity in digital cash, aka central bank digital currency (CBDC),…

ECB: The impact of central bank liquidity support on banks’ balance sheets

November 14, 2019

Central Banks, ECB, Liquidity

Working Paper Series No 2326 / November 2019 Leo de Haan, Sarah Holton, Jan Willem van den End We empirically analyse the relationship between longer term central bank liquidity support…

Working group on euro risk-free rates recommends fallback arrangements for users of €STR

November 13, 2019

Working group has assessed different fallback arrangements for products referencing €STR, the new overnight euro risk free rate Working group recommends market participants to consider existing methodological review procedures of…

As Europe’s negative rates hurt bank revenues, the ECB looks at breaking the cycle

November 5, 2019

ECB, Europe, Interest rates

ECB, interest rates, negative interest rates, Profitability, topstory

Although the European Central Bank (ECB) appears comfortable in their continuation of negative interest rates, a chorus is rising that this policy is causing long-term damage to the region’s banks.…

ECB and People’s Bank of China extend bilateral currency swap arrangement

October 30, 2019

ECB, FX Swaps, People's Bank of China

25 October 2019 European Central Bank and People’s Bank of China extend the bilateral currency swap arrangement established in 2013 for another three years Swap arrangement has a maximum size…

The Fed and the ECB are getting backed into a corner on digital currencies (Premium)

October 22, 2019

Central Bank Digital Currency, Cryptocurrency, ECB, Federal Reserve, Regulatory

Central Bank Digital Currencies, ECB, Federal Reserve, Libra, stablecoins, topstory

Central banks are now forced to take stablecoins, or Central Bank Digital Currencies, seriously. The impetus for this is Facebook’s Libra project, but other initiatives are taking on lives of…

Risk: ECB exposes LCR window-dressing

October 8, 2019

ECB, LCR, risk, window-dressing

Liquidity rules are being gamed, the European Central Bank (ECB) has found. The supervisor conducted a specialised stress test that found a number of banks have taken steps to make…

ECB finds generally good results in stress test but over reliance on FX swaps

October 8, 2019

ECB, funding, FX Swaps, stress tests

Euro area banks have overall comfortable liquidity positions, but some vulnerabilities require further attention, ECB finds Banks showed adequate liquidity reserves to withstand stress Exercise assessed banks’ ability to handle…

ECB’s €STR goes live at -0.549

October 2, 2019

The euro short-term rate (€STR) is published on each TARGET2 business day based on transactions conducted and settled on the previous TARGET2 business day. The ECB published the €STR for…

ECB publishes the Euro money market study 2018

September 27, 2019

ECB, Money Markets

Study shows increased activity in the secured and foreign exchange swaps segments Shows some money market rates moved below deposit facility rate, especially in secured segment First study of euro…

ECB’s Yves Mersch on why cryptocurrency Libra may be a new kind of money

September 2, 2019

cryptocurrencies, ECB, Libra

Yves Mersch: Money and private currencies – reflections on Libra Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the the ESCB Legal…

Private sector working group issues recommendations on the transition from EONIA to €STR for cash and derivatives products

August 20, 2019

€STR, alternatives to EONIA, ECB

• Transition from EONIA to €STR has impact on broad variety of financial products and processes • Market participants urged to actively prepare for change in publication time of EONIA…

ECB website hacked, shut down

August 15, 2019

News and Notes – Fintech

cybersecurity, ECB

The European Central Bank (ECB) announced that unauthorized parties had breached the security measures protecting its Banks’ Integrated Reporting Dictionary (BIRD) website, which is hosted by an external provider. As…

ECB SESFOD survey says funding demand decreased through May 2019

August 5, 2019

ECB, Europe, funding, SESFOD

Results of the June 2019 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD) 31 July 2019 Credit terms eased for almost all counterparties…

ECB’s Cœuré scrutinizes big tech-backed stablecoins in G7 update

August 2, 2019

News and Notes – Fintech

Benoît Cœuré, CPMI, ECB, stablecoins

Originally envisioned as an accessible and borderless way to pay, crypto assets have generally suffered from severe price volatility and limited capacity to process transactions compared with existing arrangements. Consequently,…

Fintech weekly deals and partnerships roundup

ECB picks SIA And Colt for Eurosystem’s payments, securities and collateral infrastructures SIA, in partnership with Colt Technology Services, was awarded a 10-year license from a tender commissioned by the…

ECB reports euro gaining ground on US dollar as a reserve currency

June 17, 2019

ECB, Interest rates, Investments

dollar, ECB, Euro, reserve currencies, topstory

The European Central Bank (ECB) has released new research showing that the euro has gained momentum as a global reserve currency while the US dollar has shrunk. Issuers of reserve…

ECB provides a one-off spread between €STR and EONIA

May 31, 2019

€STR, ECB, Eonia, ESTER

Spread between €STR and EONIA is calculated at 0.085% (8.5 basis points) Spread is based on methodology recommended by Working Group on euro risk-free rates Spread is to be used…

ECB working paper on banks’ reaction to negative rates in the euro area

May 21, 2019

ECB, Europe, negative interest rates

ECB Working Paper Series Negative interest rates, excess liquidity and retail deposits: banks’ reaction to unconventional monetary policy in the euro area Selva Demiralp, Jens Eisenschmidt, Thomas Vlassopoulos Negative monetary…

ECB exec says banks should simplify IT for cyber resilience

May 14, 2019

News and Notes – Fintech

cybersecurity, ECB

Excerpts from statement by Sabine Lautenschläger, member of the Executive Board of the European Central Bank, at the G7 2019 conference on “Cybersecurity: Coordinating efforts to protect the financial sector…

What was said about crypto, blockchain and trust at IMF’s spring meeting

April 16, 2019

Blockchain, Technology

Benoît Cœuré, blockchain, Central Banks, Circle, crypto regulation, cryptoassets, ECB, IMF, J.P. Morgan, Kenya

In the digital currency world, there’s a phrase: “In crypto we trust”. And while IMF chief Christine Lagarde raised an eyebrow at the statement during a panel at the IMF’s…

Markets warned on populism eroding central bank independence

April 2, 2019

Bank of England, Regulatory

Central Banks, ECB, monetary policy, topstory, Yves Mersch

The European Central Bank’s Yves Mersch, Member of the Executive Board, recently spoke about central bank independence. There is a long history of argument on this topic, and central bank…

ECB paper: Does liquidity regulation impede the liquidity profile of collateral?

March 28, 2019

collateral, ECB, LCR

Kirsten Schmidt Working Paper Series No 2256 / March 2019 We analyze the pledging behavior of Euro area banks during the introduction of the liquidity coverage ratio (LCR). The LCR…

Transparency requirements of EU Securitisation Regulation to be incorporated into Eurosystem collateral framework

March 24, 2019

collateral, ECB, securitisations

Eligibility requirements for loan-level data reporting in collateral framework to be adjusted to reflect EU Securitisation Regulation’s disclosure requirements Eligibility criteria for asset-backed securities to change at a future date,…

ECB’s Cœuré makes the case for CCP oversight

March 1, 2019

Introductory remarks by Benoît Cœuré, Member of the Executive Board of the ECB, at a conference on CCP risk management organised by the Deutsche Bundesbank, the ECB and the Federal…

ECB papers highlight the state approach to solving market problems

February 19, 2019

Europe, Regulatory

ECB, Europe, Regulation, topstory

Recent European Central Bank (ECB) working papers on collateral have been really good, well researched and thoughtful about the problems they are tackling. They also show a continued bias towards…

ECB paper profiles the Euro IRS market

February 16, 2019

ECB, interest rate swaps

Working Paper Series The anatomy of the euro area interest rate swap market Silvia Dalla Fontana, Marco Holz auf der Heide, Loriana Pelizzon, Martin Scheicher Using a novel regulatory dataset…

ECB Working Paper: Money markets, collateral and monetary policy

February 15, 2019

collateral, ECB, Money Markets

Money markets, collateral and monetary policy ECB Working Paper Series Fiorella De Fiore, Marie Hoerova, Harald Uhlig Interbank money markets have been subject to substantial impairments in the recent decade,…

ECB finds €10.9 trillion in Euro HQLA but potential for pockets of HQLA scarcity

February 5, 2019

Availability of high-quality liquid assets and monetary policy operations: an analysis for the euro area Occasional Paper Series No 218 / February 2019 Roel Grandia, Petra Hänling, Michelina Lo Russo, Pontus…

The Eurosystem Collateral Management System (ECMS) and tri-party: good, bad or indifferent? (Premium)

February 5, 2019

Collateral Management, ECB, Europe

ECB, ECMS, European Central Bank, Eurosystem Collateral Management System, topstory

The ECB recently took the next step in their Eurosystem Single Market Infrastructure Gateway (ESMIG) project, which itself progresses the aims of the Eurosystem Collateral Management System (ECMS). We look…

ECB working paper: From cash- to securities-driven euro area repo markets: the role of financial stress and safe asset scarcity

February 2, 2019

Claus Brand, Lorenzo Ferrante, Antoine Hubert No 2232 / January 2019 Focussing on repo specialness premia, using ISIN-specific transaction-by-transaction data of one-day maturity repos, we document a gradual shift from…

ECB’s Yves Mersch: The possible triangle – frictionless movement of payments, securities and collateral across Europe

January 31, 2019

collateral, ECB, ICMA

Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the 2019 Annual General Meeting of the International Capital Markets Association’s European Repo and…

ECB publishes results of Dec 2018 SESFOD

January 31, 2019

Results of the December 2018 SESFOD Survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets Credit terms tightened for all counterparts, but non-price terms offered…

ECB to launch on-site cyber risk inspections this year

January 17, 2019

News and Notes – Fintech

Big Tech, cybersecurity, ECB, Sabine Lautenschläger, suptech

Speech by Sabine Lautenschläger, member of the Executive Board of the European Central Bank and vice-chair of the Supervisory Board of the European Central Bank, to the Banking & Payments…

ECB working paper: Re-use of collateral: leverage, volatility, and welfare

December 21, 2018

collateral, ECB, re-use

We assess the quantitative implications of collateral re-use on leverage, volatility, and wel- fare within an infinite-horizon asset-pricing model with heterogeneous agents. In our model, the ability of agents to…

Working group on euro risk-free rates seeks market feedback on transition from EONIA to ESTER and ESTER-based term structure methodologies

December 21, 2018

ECB, Eonia, ESTER

Private sector working group publishes report on transition from EONIA to ESTER Working group launches consultation on determining ESTER-based term structure methodology as fallback for contracts linked to EURIBOR Market…

Fintech bank Revolut gets European banking license

December 14, 2018

News and Notes – Fintech

ECB, fintech license, Revolut

Revolut announced that the ECB has approved the challenger bank for a European banking license. In the coming months, Revolut will be doing a lot of building and testing behind…

ECB to end Asset Purchase Program in 2018

December 14, 2018

ECB, Quantitative Easing

At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending…

ECB publishes expectations for oversight of cyber resilience

December 4, 2018

News and Notes – Fintech

cyber resilience, cybersecurity, ECB

• ECB publishes final cyber resilience oversight expectations for financial market infrastructures • Document defines Eurosystem’s expectations in terms of cyber resilience, based on existing global guidance • Reflects comments…

The ECB finds risk in ETF securities lending and TRS – is this real or a rehash of old stories?

December 3, 2018

ECB, ETFs, Securities Lending, Total Return Swaps

ECB, ETFs, Securities Lending, topstory, Total Return Swaps

The European Central Bank released their Financial Stability Report last week, including a feature on counterparty risk in synthetic and physical ETFs. We find some valid points in the analysis…

ECB announces pan-European instant payments

November 30, 2018

News and Notes – Fintech

• TARGET instant payment settlement (TIPS) now operational • TIPS means consumers can make retail payments across Europe instantly, 24/7/365 The European Central Bank (ECB) has launched an innovative pan-European…

ECB says securities finance markets lost liquidity from June to August 2018, deterioration in general collateral market

October 30, 2018

ECB, Europe, securities finance, SESFOD

Results of the September 2018 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD) Credit terms tightened, in line with the expectations reported in…

Reuters: EU shows no sign of heeding U.S. threat over derivatives clearing

October 29, 2018

CCPs, ECB, European Union

The European Union is proposing to give the European Central Bank sweeping powers over foreign clearing houses in times of market stress, an EU document showed, as the bloc shows…

ECB’s Draghi argues for continued central bank independence

October 29, 2018

Central Banks, Draghi, ECB

Mario Draghi: Central bank independence Text of the First Lamfalussy Lecture by Mr Mario Draghi, President of the European Central Bank, at the National Bank of Belgium, Brussels, 26 October…

The ECB’s Cœuré walks through ESTER: time is short to solve some tricky problems

October 18, 2018

ECB, Europe, Interest rates, LIBOR, Regulatory

ECB, ESTER, topstory

The ECB’s Benoit Cœuré recently spoke about ESTER, the ECB’s new overnight rate. Benchmark reform is all the rage, and Europe, while initially setting itself some tough deadlines, is now…

Several blows this week to London as a financial center post-Brexit (Premium)

October 11, 2018

CCP, Derivatives, Europe, Risk Management

back-to-back, Brexit, ECB, FT, ISDA, London, topstory

The odds for London thriving as a financial center post-Brexit got worse this week. Here’s what happened and where things seem to be going. Continue reading

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