德国外交关系理事会-改善欧洲央行国际角色的三个思路（英文）-2021.2-5页.pdf

COMMENTARYGerman Council on Foreign RelationsThree Ideas to Improve the International Role of the ECB The ECB has been forced in part by the COVID-19 crisis to review its bi-lateral arrangements with foreign cen-tral banks.But the recent changes made by the ECB fall short of the Europe-an Commissions ambitions to boost the international role of the euro.We suggest the ECB should put in place an alternative three-pillar frame-work to improve the international role of the ECB and cement its pivotal role in the international financial system.In a new paper released on January 19,the European Commission(EC)reit-erated its commitment to strengthen the international role of the euro.This is part of a long-standing plan that has been followed by little action so far.Al-though the report is broad,it does not mention actions to be taken by the ECB despite the fact that its role as a global lender of last resort is becom-ing ever more important to the inter-national financial system.Since the economic shock of the COVID-19 pandemic,the ECB has overhauled its euro liquidity provision to foreign non-euro central banks.The overhaul has involved reviewing exist-ing arrangements and extending a c-cess to euro swap and repo facilities to non-euro area central banks thereby helping the ECB to stabilize prices and mitigate financial stability risks do-mestically and abroad.During the 2008 global financial cri-sis and its aftermath,the ECB had to make hard choices about its FX swap policy and adopted a very conservative line,precisely when it was enjoying the generous support of the Federal Re-serves own US dollar liquidity lines.Indeed,between 2009 and 2011,the ECB refused to extend swap lines to Hungary and Poland when they were in a financial crisis and in need of euro liquidity,or to Latvia when the Swiss National Bank and the Swedish Riks-bank respectively rose to the challenge of effectively offering support when the ECB should have also been there to help.The new changes introduced by the ECB due to the COVID-19 pandem-ic do not go far enough in creating the framework to provide euro liquidity to those who may need it.The ECBs bi-lateral lending framework via swaps and repos continues to create double standards between EU member states No.04February 2021Daniela GaborProfessor of Economics and Macro-Finance,UWE BristolShahin ValleHead,Geo-Economics Program,DGAPThree Ideas to Improve the International Role of the ECB2No.04|February 2021COMMENTARYand lacks accountability and trans-parency.The ECB falls short of being a lender of last resort for financial sys-tems that are dependent on euro li-quidity.As a result,the ECB is failing to reduce financial stability risks and to promote the international role of the euro as much as it should.In this paper,we first review in de-tail the shortcomings of the ECBs new framework,which was announced on August 19,2020.We then outline a more rigorous and systematic global Lender of Last Resort(LoLR)function based on three pillars:1.A global and European network of FX swap lines to ensure appropriate distribution of euros and other hard currencies across the EU and the in-ternational financial system;2.A structural repo facility for foreign central banks to ensure the global li-quidity of euro area collateral;and 3.A discretionary emergency assis-tance facility to provide financial assis-tance to foreign countries undergoing a balance of payment crisis.DOUBLE STANDARDS FOR EU MEMBER STATES In the hierarchy of instruments avail-able to global lenders of last resort,FX swaps rank higher than repos.FX swaps create stability by protecting against volatility.In an FX swap,two countries central banks“lend”each other some of their own currency.Lets take a swap between Bulgaria and the ECB as an example.The Bul-garian central bank has a euro depos-it and that account gets credited with the agreed sum in euros,at an agreed exchange rate and for an agreed peri-od.Bulgaria pays interest on this loan of currency back to the ECB.But in re-turn for euro liquidity it also creates a corresponding Bulgarian lev loan to the ECB.These FX swaps ensure the flow of hard currency/euro liquidity where and when it is needed and pre-vent financial instability from tempo-rary liquidity shortages from setting in.In contrast,repos are more onerous for the borrowing central banks for a variety of reasons.Sticking with our example,the Bulgarian central bank needs to have euro-denominated se-curities rather than its own domes-tic currency to post as collateral to the ECB to receive euro liquidity in re-turn.Because securities are consid-ered more risky than cash,the repo loan may also be subject to“haircuts”on collateral.To account for variation in the market value of these securities,haircuts may be complemented by a daily variation margin.Repo collater-al is more difficult to service because,when the price of collateral falls,the Bulgarian central bank needs to send Danish National BankSTANDING GLOBAL FX SWAP LINEBank of JapanBulgarian National BankBank of CanadaFederal ReserveSwedish RiksbankECBBank of England Swiss National BankCroatian National BankTHE EUROPEAN CENTRAL BANKS FRAMEWORK OF SWAP AND REPO LINESSWAP LINESECB provides euro against currencies accepted by the ECB for swap line operationsSource:ECB|own illustrationREPO LINES ECB provides euro against adequate euro-dominated collateral accepted by the ECBECBNational Bank of SerbiaNational Bank of AlbaniaRepo lines granted under EUREPHungarian National BankNational Bank of RomaniaEURcollateralThree Ideas to Improve the International Role of the ECB3No.04|February 2021COMMENTARYthe ECB additional collateral to make up the value of the swap again.The ECB resorts to double standards in its treatment of EU member states by offering liquidity on different terms to some nations.These double stan-dards can be difficult to understand.For example,why would the National Bank of Hungary enjoy a repo line and not the National Bank of Poland?Why would the Danish National Bank enjoy a full swap line rather than a mere re-po line when Denmark has opted out from joining the single currency,while Romania,which is openly committed to entering the eurozone,only enjoys a repo arrangement?As a matter of principle,all countries in ERM2 the managed exchange rate mechanism used in the transition period before a country joins the single currency should enjoy a swap line from the ECB.There are numerous such examples of double standards.But there seems to be a political rationale beyond financial stability considerations for these dis-tinctions.This could explain why Cro-atia(an EU member state)would enjoy a swap line while Serbia and Albania only have a repo line.But then why leave out Montenegro,which is on the EU accession track and has unilaterally adopted the euro as its currency?Does the ECB introduce a political judgement on the various countries accession prospects?Or is it that the ECB does not want to sanction unilat-eral adoption of its currency?Wheth-er it is one or the other,it should be spelled out with more clarity to justi-fy the policy.THE IMPORTANCE OF REPO LINES FOR FOR-EIGN CENTRAL BANKSBecause swaps rank higher than re-pos in the hierarchy of financial in-struments,it is usually the instrument of choice for liquidity transactions between central banks.Repos are still the preferred method by which the Central Bank offers liquidity to com-mercial banks,adjusting the eligible collateral and the haircut proportional-ly to the perceived counter-party risk,the quality of the collateral,and the daily variation in the price of collateral.FX swaps are less onerous for count-er-party central banks because there is an established exchange rate between currencies.That means collater-al doesnt need a haircut to match the value of the liquidity received.Swaps are,in principle,reserved for central banks whose currency is more trust-ed or stable.However,this judgement of trust establishes a political distinc-tion between trusted official peers and less trusted ones.This process of mak-ing distinctions is questionable within the EU and for countries on the EU ac-cession track.The creation of the Eurosystem repo facility for central banks(EUREP),fol-lows a similar move that was made by the US Federal Reserve,and includes two important functions that should be disentangled:1.An emergency facility to deliver euro liquidity in times of distress and help liquify the foreign exchange reserves of central banks at Europes periphery.2.A structural facility to improve the flow of euro collateral and offer both repo and reverse repo windows to for-eign central banks outside of Europe to encourage the use of euro assets in their reserves as a liquid store of value.The ECB should instead consider a simpler framework with three distinct facilities,detailed below:1.A Global and European FX Swap Line NetworkThis would put in place a permanent and unlimited swap line facility with the G10 and all the EUs central banks,without discrimination.The heart of this agreement would essentially be the current permanent core swap line network(Federal Reserve,ECB,Bank of England(BoE),Bank of Canada(BoC),Bank of Japan(BoJ).In practice,this would see the ECB play a nodal role in distributing US dollars and euros to all European cen-tral banks,ensuring a stable flow of Danish National BankSTANDING GLOBAL FX SWAP LINEPERMANENT SWAP LINES TO ALL EU COUNTRIESTEMPORARY SWAP LINE FOR TRADE AND INVESTMENT SETTLEMENT Bank of JapanBulgarian National BankBank of CanadaSwedish RiksbankECBBank of England Swiss National BankCroatian National BankPBoC Bank of Mexico Bank of Korea Federal Reserve A NEW PERMANENT SWAP NETWORKSource:ECB|own illustrationThree Ideas to Improve the International Role of the ECB4No.04|February 2021COMMENTARYUSD and EUR across the European fi-nancial system.The ECB would continue to have a bi-lateral swap line with the Peoples Bank of China(PBoC)designed to facilitate trade and investment flows rather than financial stability.This would both fa-cilitate the internationalization of the RMB,which serves the purpose of a more multipolar,international mon-etary system and expand the use of the euro in China while promoting a more multipolar international mone-tary system.2.A Structural Repo and Reverse Repo Facility for Foreign Central BanksThe ECB should offer temporary and limited repo lines to selected count-er-parties for the purpose of facilitat-ing trade and investment settlement.This would be particularly useful,for instance,for countries that trade with Europe but in which the banking sys-tem does not facilitate international commerce(think of African coun-tries with weak correspondent bank-ing links);or for countries with highly euro-ized banking systems that are not in the EU,such as Serbia,Turkey,or Lebanon.Opening a standing repo and reverse repo line to all foreign central banks(with varying haircuts)would offer advanced custody and payment ser-vices in euros to all central banks.But it would also ensure the highest pos-sible level of international euro collat-eral fluidity,which is important for the conduct of the ECBs domestic policy and the control of its short-term se-cured funding rates.3.A Discretionary Emergency Assis-tance FacilityThe ECB should also consider creat-ing a standing FX swap and/or repo facility that can be accessed in cases of distinct country-level distress in particular alongside existing financial assistance programs such as the IMF and the EU Macro Financial Assistance Programme.While it may sound like this facility would duplicate the IMFs work,in the 1980s and 1990s it was rather common for IMF programs to be complemented by Federal Reserve swap arrangements.When these be-came harder to come by,G10 cen-tral banks were called on to step in via the Bank for International Settlements(BIS).This happened in 1995 during Mexicos peso crisis,which led to a$50 billion bailout package.An emergency assistance facility could be very use-ful today,for example to address Leba-nons financial cum banking crisis.CONCLUSIONThe European Union wants to pro-mote the international role of the euro in order to reap the benefits of issu-ing a true international reserve cur-rency and provide a more stable and multipolar international monetary or-der,but the ECBs framework for swap and repo lines is not up to the task.It should be revised profoundly to pro-vide a simpler and more systematic set of instruments to limit potential li-quidity risks in euros across the world and to expand the role of the euro among foreign central banks.The ECB has an opportunity to ex-pand its pivotal place in the interna-tional monetary and financial system as one of the few central banks that is connected to both the Peoples Bank of China(PBoC)and to the US Fed-eral Reserve,but,in order to do so,it must accept further operational and counter-party risks.These are inev-itable if the euro is to rise as a lead-ing international reserve currency and help reshape the international mone-tary order.A DISCRETIONARY SWAP WINDOW FOR BALANCE OF PAYMENT ASSISTANCEECBIMF programEUs Macrofinancial AssistanceBanque du LibanSource:ECB|own illustrationThree Ideas to Improve the International Role of the ECB5No.04|February 2021COMMENTARYRauchstrae 17/18 10787 BerlinTel.+49 30 254231-0infodgap.org www.dgap.org dgapevThe German Council on Foreign Relations(DGAP)is committed to fostering impactful foreign and security policy on a German and European level that promotes democracy,peace,and the rule of law.It is nonpartisan and nonprofit.The opinions expressed in this publication are those of the author and do not necessarily reflect the views of the German Council on Foreign Relations(DGAP).Publisher Deutsche Gesellschaft fr Auswrtige Politik e.V.ISSN 1864-347Editing Gareth Davies Layout Luise RombachDesign Concept:WeDoAuthor picture(s)DGAP,privateThis work is licensed under a Creative Commons Attribution 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