2010年-ECB欧洲央行_Report_on_the_lessons_learned_from_the_financial_crisis_with_regard_to_the_functioning_of_European_financial_market_infrastructures_32页_903kb

Summary of the Report on Lessons Learned from the Financial Crisis Regarding the Functioning of European Financial Market Infrastructures

Core Content

This report, published by the European Central Bank (ECB) in April 2010, examines the impact of the financial crisis on the functioning of European financial market infrastructures (FMIs), including systemically important payment systems (SIPs), central counterparties (CCPs), and securities settlement systems (SSSs). It is based on bilateral interviews with a representative sample of FMIs and financial institutions, conducted by the Eurosystem, the Bank of England, and Sveriges Riksbank.

The report highlights that, despite the challenges posed by the financial crisis, FMIs generally functioned well and played a crucial role in maintaining liquidity and stability in financial markets, particularly after the default of Lehman Brothers in September 2008. The Lehman Brothers default was a unique and unprecedented event due to its global reach and the wide range of financial markets it affected.

Main Points and Key Information

1. Information Flow Following a Default

• Challenges: FMIs and financial institutions faced difficulties in obtaining timely, accurate, and comprehensive information on defaults, especially from official sources.
• Current Framework: The EU information-sharing framework, primarily based on the Settlement Finality Directive (SFD), Banks Winding-Up Directive (WUD), Market Abuse Directive (MAD), and Capital Requirements Directive (CRD), was found to be insufficient.
• Recommendations:
  • Improve the dissemination of information on insolvency proceedings.
  • Align default communication types within the EU.
  • Enhance cross-border and global cooperation among relevant authorities.
  • Consider the need for more standardised and automated information exchange.

2. Default Management

• Risk Controls: FMIs implemented risk controls and default management procedures to limit exposure to critical counterparties.
• Challenges:
  • Ambiguity in legal documentation and operational rules led to inconsistencies in default management.
  • Close-out rules and lack of customer asset segregation caused complications in transferring positions from defaulting entities.
  • Collateral liquidation was sometimes difficult due to unclear liquidation prices and financial instability of credit institutions.
• Recommendations:
  • Enhance the clarity and consistency of default management rules.
  • Improve coordination between interconnected FMIs.
  • Review and update existing oversight standards for liquidity management.
  • Strengthen the resilience of FMIs through better stress-testing and educational measures.

3. Behavioural Factors

• Market Behaviour: Uncertainty about other participants' exposure to defaulting counterparties led to a general reduction in market activity.
• Impact: Financial institutions increasingly used direct payment systems and pre-funding for securities settlements, which affected liquidity conditions.
• Recommendations:
  • Promote better understanding of default procedures among market participants.
  • Encourage adherence to market protocols to maintain liquidity.

4. Issues Relating to OTC Markets

• Lack of Transparency: OTC markets were reported to have experienced reduced transparency and liquidity during the crisis.
• Recommendations:
  • Promote standardisation of OTC products.
  • Enhance the soundness, resilience, and transparency of OTC derivatives markets.
  • Establish robust infrastructures for OTC derivatives.

Main Lessons Learned

1. Timely and Comprehensive Information Sharing: Insolvency decisions should be communicated promptly, accurately, and transparently to all relevant stakeholders.
2. Enhanced Risk Management Frameworks: Strong risk management frameworks are essential to mitigate the contagion effects of critical counterparty defaults.
3. Coordination Among Authorities: Market authorities and central banks should cooperate closely, especially in cross-border and global contexts, to manage defaults effectively.
4. Consistency in Default Procedures: FMIs should align their default management rules to avoid inconsistencies.
5. Familiarity with Default Procedures: All market participants should be better informed about default procedures to respond effectively.
6. Evaluation of Default Management Difficulties: FMIs should assess the challenges in implementing default procedures and find ways to improve them.
7. Enhanced Liquidity Resilience: FMIs should focus on improving their liquidity resilience to handle future crises.
8. Strengthening OTC Derivatives Markets: The soundness, resilience, and transparency of OTC derivatives markets should be enhanced, including the establishment of proper infrastructures.

Follow-Up Actions

• The Eurosystem has initiated or is actively involved in several follow-up actions, including:

  • Improving information sharing between authorities and FMIs.
  • Enhancing coordination among oversight authorities at the European and global levels.
  • Evaluating the need to harmonise default procedures among interconnected FMIs.
  • Reviewing international oversight standards for FMIs.
  • Supporting market initiatives to standardise contracts and improve transparency.

• FMIs are encouraged to:

  • Enhance direct monitoring of critical counterparties.
  • Define criteria for identifying critical participants.
  • Introduce flexibility in applying preventive measures.
  • Promote educational measures on default procedures.
  • Improve stress-testing practices.

• EU supervisory and oversight authorities are urged to:

  • Enforce the segregation of client positions and related collateral.
  • Review insolvency procedures to facilitate collateral liquidation in line with ESCB-CESR Recommendation 12.

Conclusion

The report concludes that while European FMIs showed strong resilience during the financial crisis, there is room for improvement in information sharing, default management, and regulatory frameworks. These improvements will help ensure smoother functioning and more effective management of future cross-border default events.