Expanding clearing in the US Treasury market: Future-Proofing the world’s safe asset?

US Treasuries are very widely held by investors across the globe. They serve as a vital safe asset and provide the global risk-free rate. In March 2020, this market suffered a severe dislocation which was only solved by large-scale intervention by the Federal Reserve. The wide-ranging reforms of the US Treasury market, which have been launched in the aftermath of this unprecedented stress event  have recently made material progress. A core element is an expansion of central clearing for cash and repo transactions.  These reforms will substantially change the market structure of Treasury markets. They also further increase the systemic role of CCPs, which has recently been strongly illustrated both in the COVID as well as the energy stress. Against this background this Webinar aims to discuss the state of play and implications for Europe with a panel of senior academics, policymakers and practitioners.

Key questions:

• Reforms of US market structure: Clearing as a panacea?
• What will be the impact on US markets? Which other measure are necessary?
• CCPs: The next „too big to fail” entities?
• Resilience of European fixed income ecosystem: What can we learn from the US?
• What is the overall role of central banks? Are public sector backstops a permanent necessity?
• Which reforms could further help to enhance resilience (US vs EU)

Scientific coordination: Martin Scheicher, SSM/ECB and SUERF Fellow