The European System of Central Banks issued a statement on Aug. 25 expressing opposition to any change in EU regulations that would give central counterparties an automatic right of access to central bank liquidity. The statement emphasized that the current legal framework allows each central bank to determine for itself which facilities it wishes to offer to CCPs and defines the conditions for such access. An automatic right to central bank liquidity “would create moral hazard on an extraordinary scale,” the ESCB warned. The statement was issued in response to a European Commission consultation on possible changes to EMIR.
