Thanks to the work being carried out by CPMI-IOSCO on stress testing and margins, we are beginning to get a better picture of how risks are being managed across the whole CCP landscape. In my view, an important step for the future will be to put together CCP stress testing and the stress testing carried out by big global banks (one way of doing this could be to define common stress scenarios, and see how the entire system performs). Authorities, CCPs and market participants need to assess the extent to which banks will be able to absorb losses passed on to them by a CCP, and how a recovery or resolution process will affect the banking system.19 In this respect, authorities will need to pay particular attention to pro-cyclicality. As already mentioned, many of the proposed instruments to increase CCP loss absorption will have a significant cost for clearing members. We need to be aware that, very often, these costs will arise during a stressed market situation, when clearing members may already be facing significant liquidity pressure. Authorities responsible for CCPs and those responsible for banks should try and work towards a common understanding on pro-cyclicality, in order to ensure consistency in their regulatory actions. Lastly, I believe we also need to move towards a more systemic view of the interconnections between CCPs and clearing members, namely via the channel of indirect participation. The PFMI already require CCPs to identify, monitor and manage material risks arising from tiered participation arrangements.
The efforts seem to have already paid off – the year 2013 marked a turnaround in Romania’s economic development: economic growth of 3.5% driven mostly by robust export and industrial output on the supply side; a small current account deficit; historically low inflation; while the fiscal deficit was kept well below 3%. And I have every reason to believe that Romania will see further growth in the years to come. And that, unlike in the pre-crisis period, this time sustainability will be the name of the game, as hopefully we all have learned our lessons from our previous mistakes. As they say, no one really learns but from his own mistakes…  BIS central bankers’ speeches  1  Talking about sustainable economic growth, one needs to put things into perspective in order to ascertain whether the economy is on the right track. This means that short-term policies must be harmonised with the long-term vision and goals. Euro adoption could serve as such a long-term goal. And Romania has chosen to use it as an anchor. Let me say a few words about this subject. In the post-crisis period, all non-euro area EU countries in Central and Eastern Europe with floating exchange rate regimes (Czech Republic, Hungary, Poland and Romania), as well as Bulgaria, shifted to a wait-and-see approach as regards euro adoption, even though, in some of them, Maastricht criteria were already fulfilled or within reach.