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OTC Derivates Markets and the Question of Central Counterparties’ Access to Central Banks

Daniela Russo Directrice générale, Systèmes de paiement et infrastructure de marché, Banque centrale européenne (BCE).
Gertrude Tumpel-Gugerell Membre du Directoire, BCE.


The financial market turmoil has demonstrated the importance of OTC derivatives markets for financial stability. In particular, the crisis has exposed weaknesses in OTC markets that had contributed to the build-up of systemic risk. Therefore, the G20 has called for reforms, promoting especially the establishment of central counterparties (CCPs). This article documents the importance of CCPs for systemic stability and highlights the need for strengthening its resilience. In this regard, we review various options for CCPs to access central bank facilities. We conclude that when designing the framework of services and instruments that a central bank may choose to offer to CCPs, it will have to consider a wide range of aspects, including financial stability considerations and its implications for monetary policy.


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Footnotes

1   La valeur brute de marché (gross market value) représente le coût de remplacement des dérivés de gré à gré, sans prendre en compte les accords de compensation bilatéraux existants et juridiquement applicables ou la constitution de garanties sur des positions.

2   Une situation découlant surtout de la durée plus longue de l’exposition des CCP sur les marchés dérivés par rapport aux marchés au comptant où elle est limitée au processus de règlement (trois jours en principe).

3   Voir : les décisions à ce sujet du Conseil des gouverneurs de la BCE du 19 décembre 2008 et du 18 juillet 2009.


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