Joint association paper on margining liquidity support and eligibility of guarantees and non-cash collateral

Summary

  • High and volatile wholesale energy prices are leading to intolerable cash liquidity pressure for energy market participants
  • The energy industry calls for time-limited emergency liquidity support to ensure that wholesale energy markets continue to function
  • Liquidity and/or guarantees should be provided by governments or financial public law institutions to allow market participants to buffer the impact of clearing houses’ margin calls (via cash payments) on them
  • In parallel, we propose an extension of eligible collateral to non-cash collateral such as non-fully backed bank guarantees and EU Emission Allowances (or other accredited instruments). This will help market participants and clearing members to meet the margin calls of the clearing houses

This response has been compiled by EACH, EFET, Eurelectric, Eurogas and Europex and reflects the views of their respective memberships

Europex – Association of European Energy Exchanges

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