Lawmakers on a European Parliament committee on Tuesday endorsed a bill that amends the ECB’s governing statute, explicitly granting it authority over clearinghouses for euro-denominated contracts.
The legislation is part of a broader EU push for greater sway over foreign clearinghouses, such as LCH, which is majority owned by LSE, as well as those operated by CME Group Inc. and Intercontinental Exchange Inc. Clearinghouses collect collateral from buyers and sellers to limit the risk that the default of one party spreads risk through the financial system.
The ECB said a change to its governing statute, giving it “clear legal competence in the area of central clearing,” was needed to allow it to play the role foreseen for central banks in the commission’s plan.
The European Commission endorsed the ECB’s claim back in October. The EU assembly as a whole will now consider the legislation. EU member states, who function as the second house of the bloc’s legislature, must also reach their own position on the bill before talks can begin on a final text.