The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

ECB Hosts Meeting on CCPs for CDS Market, Indicates Support for Greater Transparency

Originally appeared in MiFID Monitor

Following the meetings last month hosted by the Federal Reserve Bank of New York and the European Commission, the European Central Bank (ECB) has joined the debate concerning the introduction of central counterparties (CCPs) for credit default swaps (CDSs). The ECB hosted its first meeting this week and participants included potential providers of such CCPs, their regulators and representatives from the sell side and the buy side.

The ECB indicated its support for the introduction of CCPs in this market, in line with the views of the Financial Stability Forum and of the European Commission. It underlined the importance of reducing counterparty risk and of enhancing transparency in OTC derivatives markets, especially in those parts of the market that are of systemic importance, for example, the CDS sector.

It publicly supported the introduction of CCPs for OTC derivatives as an appropriate solution to tackle counterparty risk and market transparency. The ECB indicated that CCPs, by virtue of concentrating outstanding positions in one place, reduce the counterparty risk to which market participants are exposed. Moreover, it said that they also increase market integrity, transparency and the availability of information, as well as standardising the criteria for evaluation of exposures and freeing up collateral.

Participants at the meeting also underlined the merits of multiple solutions in general and of at least one European solution.

Related content

WEBINAR

Recorded Webinar: Managing LIBOR transition

The clock is ticking on the decommissioning of LIBOR towards the end of this year, leaving financial institutions with little time to identify where LIBOR is embedded in their processes, assess alternative benchmarks and reference rates, and ensure a smooth transition. Some will be ahead of others, but the challenges are significant for all as...

BLOG

ESG: The Next Frontier for Financial Services

ESG is everyone’s favourite topic right now, but the mass of different regulations, standards and reporting requirements can be confusing. Last week at the RegTech Summit Virtual 2020, we were delighted to speak with Beate Born, Head of Strategic Projects, Investment and Trading Platforms at UBS Wealth Management, to discuss how firms could best address...

EVENT

RegTech Summit Virtual

The RegTech Summit Virtual is a global online event that will be held in June 2021 with an exceptional guest speaker line up of RegTech practitioners, regulators, start-ups and solution providers to collaborate and discuss innovative and effective approaches for building a better regulatory environment.

GUIDE

Best Practice Client Onboarding

Client onboarding is central to the success of banks, yet it continues to present challenges and the benefits of getting it right are difficult to achieve. The challenges arise from siloed systems, manual processes and poor entity data quality. The potential benefits of successful implementation include excellent client experience, improved client acquisition and loyalty, new business opportunities, reductions in costs, competitive advantage, and confidence in compliance.