Triple B - Brexit, Benchmark and Best of luck: The ever-changing treasury management in the ever-changing financial markets

ABBL Published 12.07.2019

Following the LFMA panel discussion on the benchmarks reform, the ABBL had the pleasure and privilege to welcome, on 14 June 2019, the Euro Treasury Working Group (ETWG) in the House of Finance for their trimestral working session.

The ETWG is an ad hoc committee composed of the European Central Bank (ECB) and representatives from various financial market associations around Europe, namely the Luxembourg Financial Markets Association (LFMA), the French Financial Markets Association (ACI), the Italian Associazione Operatori dei Mercati Finanziari (Assiom Forex), the Austrian Treasury Markets Association (TMA), the German Allied European Financial Markets Association (AEFMA) as well as the Maltese Financial Markets Association (FMAM). The regular working sessions of the ETWG focus not only on a number of specific technical topics, but further discuss and exchange on recent developments, issues and challenges arising in international financial markets from a treasury and trading perspective.

The main technical focus of this year’s June session concentrated, inter alia, on the benchmarks reform efforts, with the ECB presenting their point of view and listening carefully to industry concerns in terms of implementation and transitional challenges (namely from a timing perspective, but also more generally from a treasury management and structure standpoint). The members present further took the opportunity to present their thoughts on potential issues that may arise around and stressed that the cost impact for banks and other financial markets participants are potentially enormous, while remaining thoroughly problematic to accurately compute at this early stage of the transition phase.

The “elephant in the room”, however, when it comes to current incertitudes for financial market professionals remains the future departure of the United Kingdom from the European Union, favoured by British voters in a referendum held on 23 June 2016. The ABBL presented an overview on the latest Brexit developments and its potential consequences for the financial markets. The presentation discussed the political dimension (both from an EU and UK perspective, with the upcoming changes in terms of teams and leaders) as well the impact on European financial markets, derivatives trading, market infrastructures and post-trading structures.

The meeting continued with an open discussion on different challenges that each particular market encounters in terms of market evolution and treasury development. In light of increasing market pressure and fragmentation, the participants deliberated to what extent a simplification of the treasury portfolio may be a solution to more efficient and beneficial treasury management for banks.

The meeting concluded in the late afternoon with all participants welcoming the exchange and opportunity to discuss openly and freely among themselves, while welcoming the ECB’s participation to the discussion.

Picture Gallery

Discover the picture gallery of the Euro Treasury Working Group meeting.

By Gilles Walers, Legal Adviser, ABBL

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