EUROPEAN UNION: European Central Bank and Bank of England Announce Measures to Enhance Financial Stability in Relation to Centrally Cleared Markets in the European Union

Monday March 30 2015

The European Central Bank (ECB) and the Bank of England (BoE) have announced a series of measures aimed at enhancing financial stability in relation to centrally cleared markets within the EU.

• The ECB and the BoE have agreed enhanced arrangements for information exchange and cooperation regarding UK Central Counterparties (CCPs) with significant euro-denominated business.
• The ECB and the BoE are extending the scope of their standing swap line in order, should it be necessary and without pre-committing to the provision of liquidity, to facilitate the provision of multi-currency liquidity support by both central banks to CCPs established in the UK and euro area respectively. CCP liquidity risk management remains first and foremost the responsibility of the CCPs themselves.

The announcement follows the judgement on 4th March by the General Court of the EU. In light of these agreements the ECB and UK government, as set out in the UK government’s announcement, have agreed to a cessation of all legal actions covering the three legal cases raised by the UK government.

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