ACI-The Financial Markets Association (ACI) says that the Governing Council of the European Central Bank (ECB) has welcomed its so-called STEP (Short-TERM European Paper) initiative, which is designed to facilitate the convergence of the standards and practices in the short-term money markets of Europe.
In March this year, ACI published a list of recommendations to facilitate convergence. It now says the Governing Council of the European Central Bank (ECB) has decided that in principle it will support the introduction of a so-called STEP label during the first two years after its launch.
The ACI says that, for this to happen, several conditions would need to be fulfilled. First, the market convention proposed by the ACI STEP Task Force must describe precisely the nature and the scope of the STEP label and include a clear and unequivocal definition and limitation of the role of the ECB. Secondly, the STEP market convention will also have to expressly state that the ultimate responsibility of the STEP label rests with the envisaged STEP Market Committee. Finally, the ACI and the STEP Market Committee will have to express clear commitments in terms of involvement, resources and budget.
The Governing Council of the ECB also decided to accept the ACI recommendation to produce and publish STEP statistics on an ongoing basis.
The Governing Council supported ACI’s recommendation that the STEP-labelled information memoranda be made available at a central access point (though not at the ECB).
“Based on these positive developments, the Euribor-ACI STEP Task Force will work further, in close co-operation with the ECB and the ESCB, to finalise the STEP market convention and create the conditions necessary for a successful launch of the STEP initiative,” says the chairman of ACI, Godfried De Vidts.