speech joining forces : stepping up coordination on risks in central clearing introductory remarks by fabio panetta, member of the executive board of the ecb, at the second joint bundesbank / ecb / federal reserve bank of chicago conference on ccp risk management frankfurt am main, 26 february 2020 introduction i am pleased to welcome you to the second conference on central counterparty ( ccp ) risk management organised by the ecb together with the deutsche bundesbank and the federal reserve bank of chicago. we are pleased that such a wide range of public and private sector stakeholders have joined us today to discuss the key risk management challenges in central clearing. considering the increased concentration of financial risk in ccps, this is clearly an important issue. since the 2009 g20 agreement to introduce mandatory central clearing obligations for over - the - counter ( otc ) derivatives, we have observed strong growth in central clearing in these markets, in particular for interest rate swaps ( irs ) and credit default swaps ( cds ). compared with 2009, when only around 10 % of cds and 37 % of irs were centrally cleared, these figures now stand at more than 50 % for cds and almost 80 % for irs. the decision to launch mandatory central clearing was coupled with the premise that increased risk concentration in ccps must be accompanied by stringent safeguards. and indeed, global standard - setting bodies have worked hard to further enhance the resilience, recovery and resolvability of ccps. but this progress is no reason for complacency. so far, the expansion of central clearing has taken place in the context of a favourable financial environment, supported by very accommodative monetary policies. but such benign conditions will not last forever. and, over time, market value corrections may test the defences of central clearing. many regulatory reforms also still need to be fully implemented and in some areas of risk management, such as the management of extreme stress events, approaches are still evolving. finally, the rapid evolution of centrally cleared markets and of the broader financial and technological environment poses further challenges. ensuring the safety and efficiency of central clearing is critical for the ecb given the eurosystem ’ s role as central bank of issue for the euro. the large payment flows between ccps and their participants mean that inadequate financial risk management of ccps could transmit serious financial strains to institutions that are eurosystem monetary policy counterparties. interconnected payment systems and repo markets, which are essential for monetary policy transmission

all - time low. in combination with the continuation of the unlimited liquidity - providing policy it has maintained since the start of the crisis, the successive cuts in official rates have led money market interest rates to extremely low levels. the expansionary monetary policy stance was strengthened by the announcement that the ecb expects official interest rates to remain at or below the new level for a prolonged period. along with these external factors, the spanish economy has also benefited from other developments that have helped temper the contractionary pressures on demand and activity during this year. household spending began 2013 weighed down by the impact of the decline in employment on income from work and by the debt - reduction process. however, as the year unfolded, bis central bankers ’ speeches improved confidence and the somewhat less unfavourable state of the labour market have meant that private consumption has begun to pick up. further, according to the available indicators, investment in equipment has posted increases in the first nine months of the year. in a setting in which sluggish domestic demand, ongoing corporate deleveraging and the restrictions on access to financing continue to check investment, this improvement stems, above all, from the strong pace of goods and services exports, which would have led to greater investment activity by exporting firms. moreover, construction, as a whole, has continued shrinking, owing to the adjustment in residential investment and in public works. general government consumption spending has also carried on falling. as a result, national demand has continued to decline, albeit at a progressively slacker pace. the positive contribution of the external sector to activity has increased in 2013. that reflects the strong dynamism of exports, driven in recent months by the improvement in spanish competitiveness and the buoyancy of the euro area markets ; but it is also indicative of the weakness of domestic expenditure, giving rise to the contractionary behaviour of imports. as a consequence of these developments, spain will show a net lending position against the rest of the world of around 2 % of gdp, an unprecedented and record figure in recent decades. over the past months, inflation, proxied by the cpi, has been declining notably, essentially as a result of the tapering off of the effects of the vat increase over more than a year back. thus, in october, the cpi fell by 0. 1 %. foreseeably, however, positive though moderate rates of change will resume in the coming months, therefore proving compatible with the necessary continuation of the ongoing improvement in competitiveness