The Governing Council of the European Central Bank (ECB) has taken several important decisions in addition to setting interest rates. These decisions, aimed at ensuring financial stability and enhancing market infrastructure, were announced in May 2023.
On 5th May 2023, the Governing Council adopted the ECB’s Annual Report for 2022. The report, which provides a comprehensive overview of the ECB’s activities and achievements throughout the year, was presented to the Committee on Economic and Monetary Affairs of the European Parliament. It has also been made available on the ECB’s official website in all languages of the European Union.
Addressing euro area financial stability concerns, the Governing Council held discussions on 24th May 2023 based on the Financial Stability Review for May 2023. This edition of the review focuses on key vulnerabilities in the euro area financial system and includes three special features. It examines the interaction between market liquidity and funding liquidity, explores the potential impact of stress in non-bank financial institutions on euro area banks, and delves into identifying potential climate change threats and associated risks for sovereigns. The Financial Stability Review is scheduled for publication on the ECB’s website on 31st May 2023.
Recognizing the importance of embracing new technologies, the ECB announced on 28th April 2023 its intention to explore solutions for wholesale central bank money settlement using distributed ledger technology platforms. To support this initiative, a market contact group will be established to facilitate dialogue and contribute to the Eurosystem’s work in this area. More information about this announcement can be found on the ECB’s website.
The composition of the Market Infrastructure Board (MIB) was also approved by the Governing Council. Effective from 1st June 2023 until 31st May 2026, the MIB will be chaired by Ulrich Bindseil (ECB) with Inge van Dijk (NL) serving as Deputy Chairperson. Other members from euro area central banks include Maria Tereza Cavaco (PT), Alexandre Gautier (FR), Salvatore Luigi Alonzo (IT), Julian Reischle (DE), Carlos Conesa (ES), Marc Lejoly (BE), Kirsi Ripatti (FI), and Petia Niederländer (AT). Christina Wejshammar (SE) and Peter E. Storgaard (DK) will join as members representing non-euro area central banks. Additionally, Etienne Goosse and Jean-Marc Eyssautier have been appointed as non-central bank members of the MIB.
The TARGET2-Securities (T2S) contractual framework underwent a review by the Governing Council, resulting in the approval of amended agreements on 10th May 2023. These updates aim to reflect the current state and evolution of the T2S platform accurately. The revised documents will be published following their signing by the relevant parties.
Furthermore, the Governing Council noted the Eurosystem’s report on card fraud in 2020 and 2021 on 19th May 2023 and authorized its publication. The report examines trends and patterns in card payment fraud within the Single Euro Payments Area, including the impact of regulatory measures and the COVID-19 pandemic. Detailed information can be accessed on the ECB’s website.
In addition to these decisions, the Governing Council provided opinions on various legislative proposals. These included an opinion on the restriction of the negotiability of discount bills issued by the Magyar Nemzeti Bank and the extension of an interest rate cap, as well as an opinion on proposals for regulations and directives amending existing regulations and directives related to third-country central counterparties, concentration risk towards central counterparties, and counterparty risk on centrally cleared derivative transactions.
These decisions and opinions demonstrate the ECB’s commitment to maintaining financial stability, embracing new technologies, and providing transparency in its activities.