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On 31 January 2023, the European Securities and Markets Authority (ESMA) issued a consultation on the review of the methodology included in the guidelines on stress test scenarios under the Money Market Fund Regulation. The proposed changes concern amendments to the liquidity scenario which is intended to take into account the interaction between liquidity and redemption pressures in light of the COVID-19 related stress of March 2020. ESMA is also seeking to change the macro scenario so that it may better capture the macroprudential impact of the scenario, by including assumptions on the underlying markets and other market participants. ESMA has also set out considerations on a potential climate risk scenario and is seeking feedback on this point. The deadline for feedback is 28 April 2023.
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