Margins and liquidity in European energy markets in 2022

Key takeaways

• European futures markets for natural gas and electricity were deeply disrupted by the events following the Russian invasion of Ukraine, including through large fluctuations in margins.
• The fluctuations in margins put significant liquidity demands on market participants, prompting the official sector to establish liquidity facilities in some jurisdictions.
• Fluctuations in initial margins were associated with material reductions in open interest of market participants, in line with standard deleveraging mechanisms seen in financial markets.

The views expressed in this publication are those of the authors and not necessarily those of the BIS.