ESMA Wary of Funneling Energy Risks Into Banking Sector

ESMA Wary of Funneling Energy Risks Into Banking Sector

Assessment

Interactive Video

Business

University

Hard

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The video discusses the impact of geopolitical events on market volatility, particularly in energy derivatives. It covers proposed trading halts to manage this volatility, addressing concerns from banks about market impacts. The discussion extends to challenges with clearing banks and collateral acceptance, exploring uncollateralized bank guarantees as a temporary measure. Finally, it emphasizes the need for regulatory cooperation on exposure limits to ensure financial stability.

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7 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is one of the main reasons for the current volatility in the energy derivatives markets?

Geopolitical tensions

Technological advancements

Natural disasters

Economic sanctions

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the purpose of introducing trading halts in volatile markets?

To increase trading volume

To allow market players to reflect on information

To eliminate market competition

To reduce transaction costs

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does ESMA plan to implement trading halts?

Based on daily trading volume

Permanently across all markets

Only during extreme volatility periods

Randomly throughout the day

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What type of collateral do CCPs currently accept?

Any form of collateral

Only government bonds

Highly liquid collateral with minimal credit risk

Cryptocurrencies

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why is there a call to widen the range of collateral accepted by CCPs?

To increase market volatility

To help non-financial companies meet margin calls

To simplify the trading process

To reduce the number of market participants

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is one potential solution being considered to help energy companies with margin calls?

Using uncollateralized commercial bank guarantees

Reducing trading hours

Increasing transaction fees

Eliminating margin requirements

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is necessary to ensure that uncollateralized guarantees do not create financial risks?

Immediate liquidation of all assets

Permanent implementation

Strict conditions and concentration limits

Unlimited acceptance by CCPs