Moreover, it reduces the costs for triparty repos related to collateral management, settlement and legal charges, and allows trading to be executed regardless of the location of the collateral. Non-discriminatory, risk-based access to and by market infrastructures is an important element of the new international regulatory framework. With market participants increasingly moving to central clearing, the business  15  Triparty interoperability is especially relevant for standard interbank operations/repos, which are cleared at CCPs and where CCPs use standardised baskets of eligible collateral (also referred to as general collateral (GC) baskets). 6  BIS central bankers’ speeches  case for triparty interoperability is growing. Furthermore, the new CPSS-IOSCO principles for financial market infrastructures were specifically strengthened to facilitate access and interaction between such infrastructures. Some of the key parties involved in this triparty settlement interoperability initiative have started to show signs of retreating in past months. While the ECB understands the complexity of establishing a triparty interoperability model and the substantial efforts and in particular the investment costs required to make it work, it would like to strongly urge all parties to continue to work together. Interoperability will bring important benefits – by allowing a more efficient use of collateral by bringing together separate pools of liquidity. The ECB remains ready to continue to support the triparty settlement interoperability initiative and to help bring the project forward. Concluding remarks Let me conclude. The resilience and proper functioning of market infrastructures is of paramount importance to ensure well-functioning money markets.

See G. Afonso, A. Kovner, and A. Schoar, “Stressed, Not Frozen: The Federal Funds Market in the Financial Crisis”, Journal of Finance, Vol. 66, No 4, 2011. 6  See International Capital Market Association, “European Repo Market Survey”, No 23, June 2012, available at http://www.icmagroup.org/assets/documents/Market-Info/Repo-Market-Surveys/ICMA-ERC-European-RepoSurvey-June-2012.pdf. 2  BIS central bankers’ speeches  December 2012 with 172 banks participating shows a similar development. 7 The Money Market Study also compares the development of the secured with the unsecured market. And indeed, while the unsecured money market has steadily contracted since 2007, the secured money market has held its ground over the same period. Another, more recent and troubling development in the functioning of the money markets is the on-going investigations into manipulations of key money market reference rates. The ECB is closely following this development and is supporting the attempts to reform reference rates, given the role they play in the transmission of monetary policy. In our response to the European Commission’s public consultation, while stressing that reference rates should remain private market initiatives, we have called for short-term governance reforms to restore and uphold the credibility of these reference rates, associated with longer-term measures involving changes in the calculation methodology. In the short term, governance reforms and increased supervisory and regulatory scrutiny can help to restore the market’s confidence in the integrity of the benchmarks and to ensure their continuous viability.