I don't suggest that that interest rate risk will go away altogether - though if I could make just one comment on the current macro-economic situation you'll be discussing in a moment, it would be to caution you against placing too much weight on the steepness of the short-term interbank interest rate futures curve as an indicator of the likely course of official short-term interest rates - at least in the UK: our impression is that it includes quite a significant term premium. But even if interest rates are some degree less volatile, in a context of overall monetary stability, we certainly won't avoid sectoral imbalances such as we have seen over the past year or so; nor can we exclude policy failures in individual countries, which can, as we saw in the Asia crisis but happily not in the present case of Argentina, have wider repercussions. So I suspect you will have your work cut out in pricing and managing credit risk in your necessarily more diversified bond portfolios. You have a difficult job. But the efficiency with which the market allocates financial resources depends upon your doing it well. It is a heavy responsibility. But the official community equally has a responsibility to help in so far as it can. And we can help, I think, in three main ways.
I welcome the proposal to strengthen the role of CBIs. It would reinforce coordinated supervision, while reflecting the responsibilities of the ECB – as a CBI – within the supervisory framework. The role of the central bank of issue Background and rationale for the ECB recommendation However, although EU legislators can incorporate a role for CBIs into the processes for supervising CCPs, the regulation cannot go so far as to confer on the ECB the sort of binding instruments this enhanced role requires, which the ECB thought it had until challenged in court by the United Kingdom. In 2015, the General Court held that the ECB does not have the competence to regulate the activity of securities clearing systems, including CCPs. Moreover, the Court stated that the ECB would need to request an amendment to Article 22 of the Statute of the ESCB and of the ECB, which already enables the ECB to make regulations for clearing and payment systems, if it considers this necessary for the proper performance of its tasks under the Treaties2. 2/5  BIS central bankers' speeches  The ECB’s Governing Council therefore unanimously adopted a recommendation to amend Article 223 to extend it to cover derivatives, give legal effect to the ECB’s role under EMIR, and give the ECB the flexibility and autonomy to act outside EMIR where clearing would pose a severe threat to the stability of the euro. Amending Article 22 of the Statute – procedure Let me briefly explain the procedure for amending the Statute.