European Central Banks Renew Commitment to FX Global Code

The European System of Central Banks (ESCB) has welcomed the July 2021 update to the FX Global Code and collectively have renewed their Statements of Commitment.

In a release, the ESCB also highlight the “related guidance material”, namely additional guidance of pre-hedging and last look, which was published just after the Code update, and pointedly include this in their adherence statements. This brings the ESCB into line with the UK, where the local regulator, the FCA, also endorsed the Code update, and highlighted the additional guidance around last look.

In a statement, the ESCB says, “Well-functioning financial markets benefit all market participants and are important to central banks because they ensure the smooth transmission of monetary policy to the real economy. This ultimately benefits the public at large.

“Today all members of the ESCB, including the European Central Bank, simultaneously issued renewed Statements of Commitment to the Code,” it continues. “This demonstrates their strong commitment to adhere to its principles when acting as foreign exchange market participants, to align their internal practices and processes with its updated principles, and to support and promote adherence to the Code.

“With these Statements of Commitment, they emphasise that the principles of the Code are important in ensuring the continued integrity and effective functioning of the foreign exchange market,” the ESCB adds. “To fully achieve the objective of the Code, the EU central banks also encourage foreign exchange market participants in their jurisdictions to review the updated Code and renew their Statements of Commitment.”