On August 25, the European System of Central Banks (ESCB), in cooperation with the European Commission (EC), provided its contribution to the EC in connection with the EC’s obligation to provide an assessment of the need for any measure to facilitate the access of central counterparties (CCP) to central bank liquidity facilities as required under Article 85(a)(1) of Regulation (EU) No. 648/2012 on over-the-counter (OTC) derivatives, CCPs and trade repositories (EMIR).
The ESCB notes that at present, EMIR does not specify any requirements or conditions regarding the provision of central bank liquidity facilities to CCPs, and that currently it is up to each individual central bank to determine which facilities, if any, are offered to CCPs. The report cautions that it believes that members of the ESCB must retain the right to provide access to central bank facilities at their own discretion. In addition, any specific credit facility measures in EMIR must respect the principle of independence of central banks as set forth in Article 130 of the Treaty on the Functioning of the European Union (TFEU) and Article 7 of the Statute of the ESCB or otherwise under national provisions.
The report concludes that the ESCB supports maintaining the current legal framework, and believes that the existing framework provides CCPs with adequate access to central bank facilities.
The ESCB’s report can be found here.