My dear impertinents, dear impertinents,
“The energy financial markets are in an extremely delicate situation. Many experts fear the risk of an energy Lehman Brothers. Rightly or not? The explanations of Charles Sannat, founder of the insolentiae site. Ecorama of September 12, 2022, presented by David Jacquot on Boursorama.com »
Yesterday I was the guest of Ecorama to talk about derivatives on the energy markets, the explosion of which, somewhat in the same mechanism as all real estate derivatives had caused the subprime crisis, threatens the global financial and banking system in general and European in particular.
Because states are aware of this threat, we can reasonably hope that financial catastrophe will not occur.
Here are the measures that the European Commission is considering:
– Immediate support through credit lines for market participants suffering from very high margin calls, including the case of a specific solution at European level, for example through the role of the ECB.
– Amend trading rules on energy exchanges, including temporarily modifying regulatory collateral requirements for electricity trading. Regulatory requirements for guarantees in electricity trading, including the revision of automatic price cap adjustments. automatic price cap adjustments;
– Temporarily suspend European electricity derivative markets; or subject futures trading to specific ranges
These three measures are neither more nor less than a temporary freeze, but a total freeze of the derivatives market which will be “unplugged”.
It’s a bit like a suspension of the stock exchanges, a moment that we had experienced for several days after September 11 when the American markets were suspended. No one could sell or buy anymore, which meant that your money was blocked and unavailable for an indefinite period of time.
Never forget in your heritage scenarios this possibility of blocking, of suspension, which can be decreed at any time by the States.
One more reason to always have an approach based on the diversification of your assets.
It is already too late, but all is not lost.
Prepare yourselves !
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