Clearstream has launched its Euro Night-Time Funding Link(ENTFL) service to TARGET2.
Customers will have access to their liquidity held in TARGET2 Real Time Gross Settlement (RTGS) accounts and it will be available for the settlement of transactions in euro during Clearstream’s night-time processing.
With this service, customers use dedicated liquidity from their TARGET2 account as collateral for credit granted by Clearstream to settle transactions in Euro during night-time processing. Any available liquidity in TARGET2 can be used by the Euro Night-time Funding Link up to the limit set by the customer, and is eligible as collateral for EUR credit at Clearstream.
The service operates during the night, when TARGET2 is closed for payments and provides a means to bring in collateral dedicated for Euro settlement. The collateral within Clearstream can be used for credit required in other currencies, or can still be used for additional credit in Euro.
“We are very pleased that the original service we launched in 2002 with Clearstream Banking Luxembourg has set a basis that can now be extended with TARGET2, contributing to a more efficient liquidity management by credit institutions across the euro-zone,” says Pierre Beck, head of general department, Luxembourg Central Bank.
“This service adds to the existing settlement and operational efficiency of Clearstream by creating a reliable option for our customers to easily add liquidity. This means customers can optimise the availability and use of their collateral as they can draw on their TARGET2 pool of liquidity for euro securities settlement as and when they need it. Customers manage this service using the same tool as for their TARGET2 account, making this service efficient and easy to use and implement,” adds Michael Jaeggi, member of the executive board, Clearstream Banking SA.