FRANKFURT (MNI) – European central bankers backed proposals by the
European Commission for a permanent EU-level process to coordinate
monitoring of the shadow banking sector, according to a joint release of
the Eurosystem Friday.
The Eurosystem, responding to a shadow banking Green Paper released
by the EU Commission in March, said it was working to improve its own
knowledge specifically of the securities financing and repo market, and
proposed creating a central database on repos transactions that is fed
directly by market infrastructures and custodian banks.
“The Eurosystem has a keen interest in obtaining more information
on repo market activity, both for monetary policy implementation and
financial stability considerations,” the paper said.
To that end, “the Eurosystem considers that a central database
collecting data directly from (market) infrastructures and custodian
banks … would have several advantages.”
“A central database fed by these infrastructures and custodian
banks would be the place for the much needed central view on repo market
and its participants, both banks and non-banks,” the paper said.
The Eurosystem said the collection and exchange of information on
shadow banking should be the role both of central banks and supervisory
authorities, and it suggested monitoring be led by the European Systemic
Risk Board as a result.
“Considering the systemic risk implications…the ESRB seems to be
a natural body where regular discussions of shadow banking developments
concerning the EU financial system should take place, on the basis of
regular data collection,” the Eurosystem paper said.
“The Eurosystem stands ready to provide analytical and statistical
support as regards the monitoring of shadow banking in the EU.”
— Frankfurt bureau: +49 69 720 142; email: ccermak@marketnews.com
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