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On 4 March 2015, the EU General Court rendered its judgment in a case brought by the United Kingdom against a passage of the European Central Bank’s Eurosystem Oversight Policy Framework published in 2011(1). Specifically, the UK contested the statement in the Policy Framework that central counterparty clearing houses (CCPs) settling euro-denominated security transactions should be legally incorporated, and have their managerial and operational control over all core functions, in the Eurozone.
In the Policy Framework, the ECB explained that CCPs settling euro-denominated transactions can be liable to have adverse effects on the stability of the financial system as they are the focal point of credit and liquidity risk. Accordingly, the ECB stated that CCPs with a...
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