In our role as central bank of issue for the euro, we focus solely on the interplay between central clearing and our monetary mandate. Let me clarify this by highlighting three channels through which central clearing interacts with core central bank objectives. First, CCPs play a key role in the euro money market, which is essential for monetary policy transmission. In the EU, 70% of repos are cleared through a CCP, making repo CCPs critically important to this market. CCPs also act as major repo counterparties when reinvesting the large amounts of collateral they collect. Disruptions affecting, or caused by, a CCP can have ripple effects through the euro repo market, which may affect the conduct of monetary policy. The ECB therefore has a clear and legitimate interest in preventing or mitigating such disruptions. Second, CCPs are financial market hubs connecting banks as well as other market infrastructures, including payment systems. As a result, large payment flows are settled on a daily basis between CCPs and their participants. Deficiencies in CCP financial risk management can transfer liquidity strains to banks, thereby affecting both their capacity to extend credit to firms and households and their reliance on the provision of central bank liquidity, not least as banks are key participants in large-value payment systems operated by central banks. Moreover, given the growth of central clearing and the promotion of settlement in central bank money, cleared markets themselves increasingly rely on these payment systems.
Nina Stoyanova: The future of money Speech by Ms Nina Stoyanova, Deputy Governor and Head of the Banking Department of the Bulgarian National Bank, at the Manager Magazine Fourth Banking and Finance Forum “The Future of Money”, Sofia, 20 October 2021. * * * Thank you for inviting me to open today’s fourth Banking and Finance Forum on the topic ofThe Future of Money. New technologies are changing the financial sector today and leading to the offering of increasingly diverse and convenient payment products in a highly competitive environment. The policies of the European Commission, the European Central Bank and national regulators are aimed at catalysing this process, to exploit more fully the potential offered by technology and to achieve cheaper, safer and more accessible payment solutions. The dynamics of the processes in Europe is also fully valid for our country. Data on payments processed by payment systems in our country show a significant growth. For the first six months of 2021, the value of payments made through the BNB-operated Real-time Gross Settlement System in BGN (RINGS) increased by 30% compared to the first half of 2020, while for the same period the value of payments in euro through the national component system of the large-value payment system in euro – TARGET2-BNB increased by 65.7%. I would like to touch briefly on some of the recent technological developments in the field of payment services in the European Union and in our country.