Insofar as this is stable and known to market participants, I think that’s fine because this does not create uncertainty. Another important criterion for me is that any volatility in shortterm money market conditions does not spill over to longer maturities, where they would start having an impact on lending rates to households and companies – variable rate mortgages, for instance.
The guidance paper on last look published this week incorporates feedback received on the draft version. This was not the first time the GFXC has sought feedback on last look practices, and the GFXC will continue to watch developments in this field to see if more work needs to be done. The guidance paper clarifies a number of important issues.