ECB

Central Banks, 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

CCPs, ECB

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

ECB, HQLA

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

ECB, Repo

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

ECB, SESFOD

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

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

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

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

ECB, Payments

• 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

Benchmarks, ECB, Europe, Interest rates, 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

FT: ECB warns banks to curtail booking trades and loans in UK after Brexit

October 9, 2018

back-to-back, Brexit, ECB, FT

The European Central Bank has warned banks they have a maximum of three years after Brexit to curtail their use of a “back-to-back” booking model that makes it easier to…

The ECB on repo in the Leverage Ratio: taking a strong stand today may not turn out well tomorrow

October 8, 2018

Basel III, Europe, Regulatory

ECB, Leverage Ratio, Repo, topstory

The ECB’s publication last week of “The implications of removing repo assets from the leverage ratio” creates a conundrum. On the one hand, the findings stick true to the Basel…

ECB: removing repo from the Leverage Ratio would be a bad idea

October 3, 2018

ECB, Leverage Ratio, Repo

This article summarises the key findings from a counterfactual exercise where the effect of removing repo assets from the leverage ratio on banks’ default probabilities is considered. The findings suggest…

ECB: G-SIB framework encourages balance sheet window-dressing

October 3, 2018

ECB, G-SIBs, window-dressing

This article evaluates whether the global systemically important bank (G-SIB) framework has incentivised banks to adopt window-dressing behaviour, and whether their engagement in capital market activities has facilitated it. Window-dressing…

ECB Draghi’s letter to EU Parliamentarian says no central bank digital bank cryptocurrency for now

September 21, 2018

central bank digital currency, cryptocurrencies, ECB

Frankfurt am Main, 12 September 2018 L/MD/18/306 Honourable Member of the European Parliament, dear Mr Fernández, Thank you for your letter, which was passed on to me by Mr Roberto…

ECB’s Draghi says no plans for central bank digital currency

September 17, 2018

central bank digital currency, ECB, Mario Draghi

The European Central Bank and the Eurosystem currently have no plans to issue a central bank digital currency, wrote ECB president Mario Draghi in a letter to the European Parliament.…

ECB’s Mersch warns on pan-European payment failure and big foreign fintech dependence

September 5, 2018

ECB, Europe, fintech, Payments, Yves Mersch

Excerpt from speech by Yves Mersch, Member of the Executive Board of the ECB, at the European Institute of Financial Regulation (EIFR), Paris, 3 September 2018 Progress towards an integrated…

How can central banks effectively monitor transmission of monetary policy?

August 8, 2018

Collateral, ECB, Liquidity Management

ECB, Liquidity, monetary policy, topstory

A new paper from the European Central Bank looks at the transmission of monetary policy and the concept of fragmentation, which means that monetary policy goals are not getting through…

IMF recommends that Eurozone central banks harmonize securities lending arrangements

July 24, 2018

Alex Tonhazy

ECB, IMF

The current ECB/Eurosystem framework has been effective in responding to market strains, but a more comprehensive, forward-looking and harmonized framework would be helpful in supporting the monetary, banking and capital…

The ECB swings a big stick on supervision of repo CCPs

July 19, 2018

CCP, ECB, Europe, Repo

CCP, Cover 2, ECB, topstory

We understand the impulse: if a CCP’s potential failure could cause severe damage to a region’s economy and monetary policy operations, then that region’s financial supervisors should want to have…

ECB’s Cœuré describes central bank’s actions for AI and DLT in markets

July 17, 2018

artificial intelligence, Benoît Cœuré, blockchain, ECB

Excerpts from speech by Benoît Cœuré, Member of the Executive Board of the European Central Bank, at the Central Bank Payments Conference, Singapore, 26 June 2018 There is no doubt…

ECB calculates ESTER, will release historical time series data (pre-ESTER)

June 28, 2018

ECB, ESTER

The European Central Bank (ECB) has decided on the final methodology for calculating the euro short-term rate (ESTER) – an overnight unsecured rate based entirely on money market statistical reporting…

European regulators’ working group consults on EONIA successor

June 21, 2018

alternatives to EONIA, ECB, ESTER, GC Pooling Deferred, RepoFunds Rate

The working group on euro risk-free rates is calling on market participants and all other interested parties to comment on its assessment of candidate euro risk-free rates against key selection…

Financial stability up but so is risk taking, says ECB

May 24, 2018

ECB, Financial Stability Review

Systemic risk for the euro area has remained low over the past six months, the latest biannual Financial Stability Review of the European Central Bank finds. This was helped by…

ECB comments on Brexit transition period, intends third country “flexibility”

May 23, 2018

Brexit, ECB

The precise content of the withdrawal agreement will not be known until late 2018. Uncertainty remains, including the risk that the agreement might not be ratified by all sides involved…

Central bank digital currencies keep getting a lot of attention at central banks. What’s going on here?

May 22, 2018

Cryptocurrency, ECB, Federal Reserve, Technology

Bank of England, blockchain, central bank digital currency, ECB, Federal Reserve, topstory

For all the times central bankers have said that they don’t plan to launch digital currencies any time soon, their staffs sure are paying a lot of attention to the…

ECB publishes comments on new euro short-term rate, names it ESTER

May 21, 2018

News and Notes, Uncategorized

ECB, ESTER

The ECB’s Governing Council decided that the new ECB unsecured overnight rate would be called ESTER (euro short-term rate). This interest rate, which will be produced before 2020, will complement…

ECB data show SFTs credit terms tightening in early 2018, except for hedge funds

April 27, 2018

ECB, SESFOD, SFTs

Slight tightening in credit terms, for all types of counterparties except hedge funds, with expectations for more favorable credit terms over the next quarter Credit terms appear to be stabilizing…

No one is happy about US deregulation except these people (Premium)

April 24, 2018

Basel III, Dodd-Frank, ECB, Federal Reserve, Regulatory, US

Basel III, deregulation, Dodd-Frank, ECB, House, Senate, topstory, US

As US deregulation moves into gear, international regulators are voicing their deep concern with the breakdown of the attempted finalization of Basel III. Meanwhile, the US Congress pushes ahead while…

ECB and BoJ analyze securities settlement systems: delivery versus payment in a distributed ledger environment

March 28, 2018

News and Notes, News and Notes – Fintech

Bank of Japan, DLT, ECB, settlement

The main findings of the joint analysis, as detailed in this report, can be summarized as follows: DvP can run in a DLT environment subject to the specificities of the…

ECB launches 2nd consultation on new euro unsecured ON interest rate

March 15, 2018

alternatives to LIBOR, ECB, Euro, interest rate benchmarks

The European Central Bank (ECB) is calling on market participants and all other interested parties to provide comments on the detailed features of the new unsecured overnight interest rate.…

Moody’s: ECB’s changes to covered bond haircuts will increase CPT issuers’ repo funding costs

March 8, 2018

covered bonds, ECB, Moody's, repo haircuts

Changes to the haircuts that the European Central Bank (ECB) applies to covered bonds posted by their issuers as collateral in repo transactions will increase the cost of repo funding…

ECB consults on capital and liquidity management for banks

March 2, 2018

CRD IV, ECB

The European Central Bank (ECB) launched a public consultation on the draft principles underlying its expectations for banks’ internal capital adequacy assessment processes (ICAAPs) and internal liquidity adequacy assessment processes…

ECB publishes new guidelines on haircuts, collateral, and Eurosystem monetary policy implementation

February 9, 2018

News and Notes, Uncategorized

collateral, ECB, Haircuts