International standard setters for banks, market infrastructures and securities markets, including the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO), have issued a survey on the use of margin calls as part of an examination into liquidity shortfalls during the early stages of the Covid-19 pandemic (March and April 2020).
In press release posted on its website, the BCBS said it was partnering with the other committees to invite clients (i.e., entities that participate in these markets through an intermediary) and non-bank intermediaries to complete a survey on a voluntary basis. Separately the committees are collecting data from central counterparties (CCPs) and bank intermediaries.
In November 2020, the Financial Stability Board (FSB) published a Holistic Review of the March Market Turmoil, noting that some market participants in the non-bank financial intermediation (NBFI) sector experienced a Covid-19 related liquidity shock in March 2020. The report also noted that increased volatility triggered margin calls, which contributed to a “dash for cash.” “As part of the work programme to enhance the resilience of the NBFI sector, the G20 agreed that the FSB should coordinate with the Committees to look at issues around margin calls during the early stages of the Covid-19. “In particular, an ad-hoc group comprising representatives of the committees´ members would carry out a data-driven analysis of cleared and uncleared margin in that period and make policy recommendations, as appropriate. The results of this work will be incorporated in the overall FSB NBFI work, with a report delivered to the G20 by the FSB,” the release said.