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

Upcoming Webinar: Developing operational resilience

Date: 25 March 2021 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes Financial institutions’ operational resilience – essentially the ability to prevent, adapt and respond to, and recover and learn from operational disruptions – has come under extreme pressure during the coronavirus pandemic, with last year’s March lockdown creating unprecedented circumstances...

BLOG

ESMA Releases Long-Awaited Third-Country Draft Rules

ESMA this week published its final report containing draft rules for third-country firms providing investment services in the EU under the MIFIR and MiFID II regimes. The document should provide some long-awaited clarity around the ability of third-country firms to operate in Europe – including, of course, the UK, upon its final departure from the...

EVENT

Data Management Summit New York City

Now in its 10th year, the Data Management Summit (DMS) in NYC explores the shift to the new world where data is redefining the operating model and firms are seeking to unlock value via data transformation projects for enterprise gain and competitive edge.

GUIDE

RegTech Suppliers Guide 2020/2021

Welcome to the second edition of A-Team Group’s RegTech Suppliers Guide, an essential aid for financial institutions sourcing innovative solutions to improve their regulatory response, and a showcase for encumbent and new RegTech vendors with offerings designed to match market demand. Available free of charge and based on an industry-wide survey, the guide provides a...