The Financial Stability Board (FSB) recently published a report on liquidity in core government bond markets. The report forms part of the FSB’s work programme to enhance the resilience of non-bank financial intermediation (NBFI). Changes in core government bond markets over the past decade may have made them more prone to liquidity imbalances in times of stress. The severe dislocations experienced in those markets during the March 2020 turmoil were the outcome of large spikes in the demand for liquidity by various market participants, especially non-banks. Continue reading…

Kwayga, the leading online matching platform for national and international B2B buyers and suppliers within the food and beverage industry, has announced that it will be offering one year free premium membership to its platform to Ukrainian food and beverage suppliers as a way of supporting the industry during the ongoing conflict with Russia. The announcement came during the recent webinar hosted by Kwayga called ‘Ukraine is open for business’ and included speakers such as Taras Kachka, Deputy Minister of Trade Representative at the Ministry of Economy of Ukraine, Larysa Gerasko, Ambassador of Ukraine to Ireland and Mariia Dehtiarova, Export Promotion Manager at U-Food Association, whose mission it is to develop and promote Ukrainian food worldwide. Continue reading…

The Financial Conduct Authority (FCA) has found 7.8 million people are finding it a heavy burden to keep up with their bills, an increase of around 2.5 million people since 2020. The FCA has published a snapshot of the latest edition of its landmark Financial Lives survey, which was carried out between February and June 2022. One in four UK adults are in financial difficulty or could quickly find themselves in difficulty if they suffered a financial shock, and 4.2 million people have missed bills or loan payments in at least three of the six months before the survey took place.   Continue reading…

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published the second Trends, Risks and Vulnerabilities (TRV) Report of 2022. The Russian war on Ukraine against a backdrop of already-increasing inflation has profoundly impacted the risk environment of EU financial markets, with overall risks to ESMA’s remit remaining at its highest level. In the first half of 2022 financial markets saw faltering recoveries, increasing volatility and likelihood of market corrections. Separately, crypto-markets saw large falls in value and the collapse of an algorithmic stablecoin, highlighting again the very high-risk nature of the sector. Continue reading…

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published the results of its fourth stress test exercise of Central Counterparties (CCPs). The results confirm the overall resilience of European Union (EU) CCPs, as well as third country Tier 2 CCPs, to credit, concentration and operational risks under the tested scenarios and implemented framework. However, the stress test also identified areas where some CCPs may need to strengthen their risk management frameworks, or where further supervisory work should be prioritised, including on concentration and operational risks. Continue reading…

Yannis Stournaras, Governor of the Bank of Greece, made a speech at the EUROFI High Level Seminar 2022, Paris on 28 February 2022. What we observe today is mostly supply-side inflation. In fact, the acceleration of inflation mainly reflects two interrelated supply-side shocks: One comes from the pandemic. Actually, we had a series of pandemic shocks, then we had an energy shock, and finally we have the invasion of Russia in Ukraine, which, regarding its economic implications, is also a supply-side shock. In the short term, its implications are stagflationary, but, in the medium term, the implications are deflationary, depending of course on the resolution of the uncertainty. We do not know much about the resolution of the Ukrainian crisis at this moment, so we have to be cautious. Continue reading…

The Governing Council of the European Central Bank (ECB) has decided to gradually phase out the package of pandemic collateral easing measures in place since April 2020. The Governing Council has taken into account in a forward-looking manner the impact of this gradual phasing out on the collateral availability of Eurosystem counterparties, in particular with regard to their ability to continue mobilising collateral until the maturity of the outstanding targeted longer-term refinancing operations (TLTRO III). Moreover, it has considered the risk impact of each of these measures. This gradual phasing out allows ample time for the Eurosystem’s counterparties to adapt, and is scheduled to take place in the following three steps.
Continue reading…

The Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements, and the International Organisation of Securities Commissions (IOSCO) have today published a report analysing existing financial resources and tools for central counterparty (CCP) recovery and resolution, which confirmed the need for further work on CCP financial resources. In November 2020, the Chairs of the FSB, CPMI, IOSCO and of the FSB’s Resolution Steering Group publicly committed to collaborate on and conduct further work on CCP financial resources in recovery and resolution. This report presents the results of the evidence gathering and analysis on existing financial resources and tools for CCP recovery and resolution carried out in 2021. Continue reading…

The European Union is filing today a case against China at the World Trade Organization (WTO) for restricting EU companies from going to a foreign court to protect and use their patents. China severely restricts EU companies with rights to key technologies (such as 3G, 4G and 5G) from protecting these rights when their patents are used illegally or without appropriate compensation by, for example, Chinese mobile phone manufacturers. The patent holders that do go to court outside China often face significant fines in China, putting them under pressure to settle for licensing fees below market rates. This Chinese policy is extremely damaging to innovation and growth in Europe, effectively depriving European technology companies of the possibility to exercise and enforce the rights that give them a technological edge.
Continue reading…