Deutsche Bank has partnered with Clearstream and Euroclear to help clients to optimize collateral as part of TARGET2-Securities (T2S), the upcoming platform that will harmonize securities settlement in the Eurozone.
The partnership will provide clients with a single entry point from which they can reach the collateral pools and distribution channels used by key institutional and market infrastructure firms. Deutsche Bank says the agreements with the two international central securities depositories are part of the bank’s liquidity solution and will open its architecture to offer clients access to a wider range of institutional collateral takers.
Clients will benefit from a reduction of funding costs by mobilizing eligible assets cross-jurisdictionally in a safe and custody-integrated framework, says Deutsche Bank. The global footprint of this direct custody franchise will facilitate reach beyond T2S and free up assets otherwise idle to be used to fulfil margin obligations in automated cross border book entry transfers, it adds.
Rafael Moral, head of Investor Services, Institutional Cash & Securities Services at Deutsche Bank, says: “This partnership with Clearstream and Euroclear forms part of Deutsche Bank’s larger T2S strategy which is designed to provide our clients with direct access – through a centralized technical hub – combined with specialized local expertise and client service.”
Jo Van De Velde, managing director and head of Euroclear’s Product Management Division, says: “By connecting to Euroclear’s Collateral Highway, clients can source, mobilize and allocate securities from wherever they are held, unlock central bank liquidity, post collateral in response to CCP margin calls and access a broad array of secured transactions including tri-party repos and securities loans. Today’s announcement signals another significant step in the development of an open and industry-led collateral ecosystem.”
Jean-Robert Wilkin, head of Product Management of Clearstream’s Global Securities Financing division, says: “We progress on our journey to bring global exposures and collateral locations efficiently and reliably together: our Global Liquidity Hub links an increasing number of clearing houses globally to collateral aggregators like central securities depositories, exchanges and agent banks like Deutsche Bank. Going via Clearstream will allow our clients to manage their collateral needs in a T2S environment and beyond in real-time.”
Deutsche Bank Furthers T2S Strategy Via Partnership With ICSDs
Clients will benefit from a reduction of funding costs by mobilizing eligible assets cross-jurisdictionally in a safe and custody-integrated framework, says Deutsche Bank.