Klaus Löber has won support from the European Parliament’s Committee on Economic and Monetary Affairs (ECON) to become chairman of the CCP Supervisory Committee, the European Securities and Markets Authority's oversight committee for clearinghouses active in the EU. The lawmakers backed his nomination by a 43-2 vote with eight abstentions.
ECON members also voted in favour of Nicoletta Giusto and Froukelien Wendt as independent members of the committee, which is responsible for preparing draft opinions and decisions in relation to EU and third country CCPs for adoption by ESMA's board of supervisors.
The appointments are subject to confirmation in the European Parliament's plenary session later this month and will finalise the set-up of the CCP Supervisory Committee, which has been established under the revised European Market Infrastructure Regulation (EMIR 2.2).
The EMIR 2.2 regime requires that a committee be established to carry out the tasks assigned to ESMA regarding the recognition and direct supervision of third-country CCPs, and the promotion of supervisory convergence among national competent authorities on the authorisation and supervision of EU CCPs.
The committee is made up of a chair and two independent members as well as the competent authorities of member states where a CCP is established and central banks of issue of EU currencies.
The vote comes a week after ECON members held hearings with the three candidates and praised ESMA for the qualifications and gender balance of the trio.
In his hearing, Löber, who is currently head of the European Central Bank's oversight division for financial markets infrastructures, emphasised the need to enhance the resilience of CCPs.
"The basic aims of the new EMIR regime are building on past experiences and improving the existing framework by providing a framework to further enhance the safety and efficiency of CCPs,” Löber said.
“In the current testing environment, the new structure enhances the sharing and availability of information, the interaction and the conversion of approaches inside the EU when it comes to supervision, and it is crucial to have a consistent approach when it comes to looking at the shortcomings and also the enhancements regarding the resilience of individual CCPs," Löber continued.
"One particular aspect is Covid-19. We have witnessed some issues and I am pleased to see that CCPs have proven to be stable and robust even under challenging, highly volatile, high volume situations. There are [however] issues surrounding margin and liquidity that will need to be addressed."
During the Q&A sessions, Wendt, who is currently a senior financial sector expert at the International Monetary Fund, noted that CCPs need to be careful that margin calls on traders during market turmoil do not make things worse. Demands for extra margin “can be quite detrimental,” Wendt said. “I would plead for a kind of judgement to avoid creating a liquidity squeeze by forcing dealers to rush around obtaining collateral."
Meanwhile, Giusto, who is senior director and head of international relations at Italian regulator Commissione Nazionale per le Società e la Borsa (Consob), said she supports the idea of conditional and time-limited equivalence which would provide flexibility and guarantee a level playing field and protection of the European market and European operators.
The lawmakers backed Giusto's nomination by a 47-1 vote with five abstentions, and Wendt's nomination by a 42-2 vote with nine abstentions.
In a statement, ESMA said that the finalisation of the CCP Supervisory Committee, in conjunction with the finalisation of the Delegated Acts on fees, comparable compliance and tiering of CCPs by the European Commission, will conclude the preparatory steps for the full implementation of the EMIR 2.2 regime.