Eurex Repo and Clearstream say that the eligible collateral for the GC Pooling market and the Eurosystem Collateral Management Services was extended to French bonds. This means that customers have now access to a wider range of securities to pledge as collateral to the European Central Bank (ECB) allowing them to access liquidity in an efficient and secured way.
The extension became feasible following the approval of the Governing Council of the ECB to use the direct and the relayed link from Clearstream Luxembourg and Clearstream Banking Frankfurt to Euroclear France (France) for the collateralisation process of Eurosystems credit operations. This specifically enables eligible counterparties to benefit from Clearstreams Collateral Management Services by including these assets in their collateral pool.
After the extension, the Euro GC Pooling basket, which can be used for ECB open market operations, now encompasses more than 8,000 denominated securities. The pool consists of Eurobonds, government bonds, covered bonds (e.g. Pfandbriefe) and agency bonds from Germany, Italy, Austria, Belgium, the Netherlands, Luxembourg and France. A full re-use possibility as collateral for ECB open market operations can be arranged through Clearstreams
integrated Collateral Management Services.
“The GC Pooling market has proven to be a reliable liquidity pool even in difficult market circumstances,” says Marcel Naas, managing director of Eurex Repo GmbH. “The latest enhancement to French bonds as ECB eligible collateral increases the efficiency and cash funding potential for our participants.”
“The expansion to French securities creates a much larger collateral pool for Clearstreams clients,” says Stefan Lepp, head of global securities financing, Clearstream. “In times of uncertainty, we offer them the possibility to actively and closely manage their cash liquidity as well as to optimize the use of their collateral through Clearstreams wide range of Collateral Management Services.”
In September 2008, the average outstanding volume in GC Pooling peaked at 47 billion compared to 15 billion a year ago. A new record was set on 6 October with daily outstanding volume of 56 billion. 28 Eurex Repo participants are currently active in this segment. GC Pooling also enables the settlement of high-volume transactions, and has already processed individual transactions in excess of 10 billion.
D.C.