EU rules changes may cause power market liquidity risk

Power market risk managers face a new set of liquidity and market risks if the European Union (EU) enforces proposed regulation changes, says RWE chief

liquidity ratio

Proposed changes to EU financial regulation run the risk of removing liquidity from burgeoning power markets while increasing market risk, says Paul Dawson, head of regulatory affairs at RWE Supply & Trading.

Two key areas of concern for energy producers in the on-going overhaul of EU financial markets regulation are the dangers of increased liquidity risk resulting from central counterparty (CCP) clearing requirements and subsequent regulatory overlaps in areas such as post-trade data capture.

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