FRANKFURT (Reuters) – The European Central Bank needs to have appropriate oversight of both domestic and foreign clearing houses if it is to lend them cash when they need it, ECB board member Benoit Coeure said.
Coeure stigmatized proposals that would give the ECB greater control over central clearing counterparties (CCPs) from outside the European Union while leaving domestic ones under the authority of domestic supervisors.
“A responsible central bank cannot extend liquidity to any entity without having a minimum level of information and control over it,” Coeure told an ECB event.
“It would be rather strange if such differentiation were to make it more difficult for us to provide liquidity to EU than to third-country CCPs.”
Clearing houses, essentially the middle man between buyers and sellers of financial assets, have come into greater focus due to Brexit because much of the euro clearing business takes place in London.
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