×
ECR

Swimburne: Central counterparties legislation must not pass on risk to European investors

28 November 2016

Swimburne: Central counterparties legislation must not pass on risk to European investors

Today the European Commission released legislation concerning recovery and resolution of Central Counterparties (CCPs).

Today the European Commission released legislation concerning recovery and resolution of Central Counterparties (CCPs).

Following the post-crisis G20 commitment in 2010 by Heads of Government to centrally clear derivative products, this legislation looks to address the systemic risk created by concentrating risk into clearing houses.

This legislation is the result of over three years of work on the international level by the Financial Stability Board (FSB) and CPMI-IOSCO.

Kay Swinburne, Conservative MEP and key negotiator on the file said:

“We have been waiting for some time for this legislation to be proposed and I am glad that the Commission has waited for the international work to near completion before coming forwards.
“As rapporteur on the pre-legislative report I was clear that CCPs are not national concerns but international concerns. We have created hubs which concentrate risk in the system and we now have a responsibility to ensure that they are as stable as possible.

“The Parliament has always worked hard to ensure that end investors who have no say over the risk management of a CCP are not unfairly called upon to bail one out should it get into difficulties. While spreading the burden of failure over a greater number of institutions may be appealing, it should only be used as a very last resort under the control of public authorities.

“The key purpose of this legislation should be to ensure every possible measure is in place to prevent tax payers from having to bail out CCPs – either through central bank money or direct public intervention.

“The reason CCPs were so attractive to regulators and heads of government in 2010 was because of their mutualisation of risk. We need to ensure that the structure of recovery and resolution plans, that hopefully will never be used, incentivises every day good governance and risk management of CCPs. Ensuring that those with a say in the risk management of CCPs ultimately bear the brunt of the burden should these fail.

“I’m looking forward to working closely with my colleagues on the ECON committee to ensure that this legislation stays as close to the internationally agreed principles as possible and addresses the obvious financial stability concerns created by concentrating risk in CCPs.”

SHARE

ECR

OUR TWEETS

ECR Group

21 hours ago

Wishing all Christians around the world a blessed #Pentecost as they celebrate the birth of the Church. #WhitSunday pic.twitter.com/BiqCsIRroS

ECR Group

3 days ago

MEP @hermanntertsch: ‘Agriculture is vital, but with the #EUFarm2Fork we punish farmers with yet more bureaucracy.… twitter.com/i/web/status/1…

ECR Group

3 days ago

@GreenpeaceEU @AnnaZalewskaMEP it’s not about ignoring science, we simply seek to implement a climate change progra… twitter.com/i/web/status/1…

ECR Group

3 days ago

@GreenpeaceEU @AnnaZalewskaMEP Scientists talk science but politics must always consider the big picture. The ECR i… twitter.com/i/web/status/1…

ECR Group

3 days ago

MEP Anna Zalewska: ‘The #EUClimateLaw must include an impact assessment analysis to prepare our economies & citizen… twitter.com/i/web/status/1…

ECR Group

4 days ago

MEP Johan Van Overtveldt: ‘We need a flexible approach towards the #RecoveryFund whilst strengthening the internal… twitter.com/i/web/status/1…

ECR Group

6 days ago

We call on the EU to protect Hong Kong’s autonomy, rule of law and fundamental freedoms. Read our full statement he… twitter.com/i/web/status/1…

ECR Group

6 days ago

MEP Angel Dzhambazki: ‘The Conference on the #FutureofEurope must take into account arguments against a centralised… twitter.com/i/web/status/1…

ECR Group

6 days ago

Let's work together on the new EU-Africa partnership. The EU must now show the confidence to create a fresh & moder… twitter.com/i/web/status/1…

ECR Group

11 days ago

We are disappointed by the proposed radical changes to the EU’s food production policy. The EU should be prioritisi… twitter.com/i/web/status/1…





© 2018. All rights reserved. European Conservatives and Reformists Group