Joint Associations’ paper on access to short-term liquidity or guarantees provided by public entities and extension of eligible collateral to maintain the functioning of EU energy markets in times of extreme wholesale price development

Summary

• High and volatile wholesale energy prices are leading to intolerable cash liquidity pressure for energy market participants
• The energy industry calls for time-limited emergency liquidity support to ensure that wholesale energy markets continue to function
• Liquidity and/or guarantees should be provided by governments or financial public law institutions to allow market participants to buffer the impact of clearing houses’margin calls (via cash payments) on them
• In parallel, we propose an extension of eligible collateral to non-cash collateral such as non-fully backed bank guarantees and EU Emission Allowances(or other accredited instruments). This will help market participants and clearing members to meet the margin calls of the clearing houses