Short Term European Paper
The Short Term European Papers (STEP, even Step abbreviated) are from an organization ( Euribor -EBF) of the European Banking Federation certified (European Banking Federation, EBF) money market securities short-term (less than one year), that is short-term bonds of companies and banks, so-called commercial papers . They are part of the primary market and are not traded on an exchange.
The original aim was to align European standards for the issue and valuation of short-term money market paper and to develop a European market for these papers. The EBF and the ACI ( Financial Markets Association ) were behind the initiative . In April 2007, the first statistics on Step were published on the ECB's website and the Step Market was also accepted by the ECB as a non-regulated accompanying market for credit operations in the Eurosystem. The initiative to create the Step Market began in 2006 and was expressly welcomed and promoted by ECB President Jean-Claude Trichet , as he saw major deficits compared to the US market for commercial paper.
However, according to STEP's own statement, the quality seal, which the issuer can apply for and confirms compliance with the Step standards, does not expressly assess the creditworthiness of the issuer or the truthfulness of the information provided by him.
At the beginning of 2013, the Step market was criticized because it was largely uncontrolled and non-transparent and would also serve as a license to print money, especially for French banks. The reason was that in France in particular the Step Market was used as an instrument for obtaining credit from the European Central Bank. The French banks can borrow money by depositing step bonds with the French central bank, which handles most of the step market, and these in turn can use these bonds as collateral with the European Central Bank (ECB) without the latter having any independent insight into the receives basic data (such as price, interest rate, rating) of the bonds. To do this, it relies on the information provided by the French central bank, which in turn relies on information from Euroclear France . Since it has close ties to international commercial banks through its parent company and is itself active in the bond market (it can also deposit Step bonds as security with the ECB), a conflict of interest has been criticized here. In 2012, the ECB stipulated that the national central banks of the euro zone can also accept papers with a rating in the BBB range at their own risk and deposit them with the ECB as collateral.
The banks in the euro area also trade with each other with step papers and can deposit these with the ECB as security.
At the beginning of 2013, the Step Market already had a volume of 445 billion euros. Critics point out that this results in a much larger volume of credit default risk than buying up government bonds from distressed euro countries. While the government bond purchases by the ECB were around 200 billion euros up to the beginning of 2013, the banks were in debt to the ECB with 1,300 billion euros. According to critics, this would also call into question the independence of the ECB, which, according to the EU's plans, should also be responsible for European banking supervision.
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Individual evidence
- ↑ A non-profit organization founded in 1999 under Belgian law with headquarters in Brussels. Members are banks of the European Union with reference to the Eurozone.
- ↑ Founded in 1955 as the Association Cambiste Internationale, in 1995 they changed their name to the Financial Markets Association. Euribor ACI was founded in 1999 by the euro member countries within the ACI.
- ↑ accepted as a non-regulated market for collateral purposes in Eurosystem credit operations , ECB press release April 2, 2007 - First publication of Short-Term European Paper (STEP) yield statistics
- ^ Jean-Claude Trichet The state of european financial integration , speech at the Euromoney Conferences, Paris, November 28, 2005, pdf
- ↑ A STEP label does not relate to the creditworthiness of issuers or the accuracy of the information provided , Official Website, Stepmarket Convention ( Memento of the original from April 20, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ M. Brendel, S. Jost The European printing press is getting out of control Die Welt from January 6, 2013
- ↑ See Standard & Poor’s rankings .
- ↑ A special expansion took place from the beginning of 2007, when the market exceeded the 100 billion euro mark for the first time; the 400 billion mark was exceeded at the end of 2008.
