Eurex Repo, Eurex Clearing and Clearstream said an extension of the GC Pooling market for secured funding will be made available for active bank participants to further strengthen their service scope towards corporate customers, asset managers and insurance companies. The new service is scheduled for the fourth quarter of 2012.
Global Custodian first reported on the extension in January this year. Reto Francioni, CEO of Deutsche Brse, parent of the three entities in the cooperation, said the extension would enable banks to respond to the growing demands coming from non-bank institutions. The enhancement to the GC Pooling product allows insurers to offer collateral to banks on a non-anonymous basis, but via CCP, enabling these insurers to meet Solvency II requirements.
Counterparty risk for corporates will be reduced, said Deutsche Brse in a press statement this week, as their cash activities are protected through the inclusion of Eurex Clearings CCP. Simultaneously, all cash and collateral management functionalities will be handled within Clearstreams Liquidity Hub including a seamless integration of the two market segments to ensure an optimized cash and collateral usage.
Our new GC Pooling Select market segment is designed to enhance the existing market infrastructure. We will preserve the relationships between banks and their non-financial clients but will enable them to benefit from our integrated combination of electronic trading and processing, central clearing and collateral management, said Marcel Naas, managing director at Eurex Repo.
With this pioneering service concept, the industry will have access to the first electronic B2C money market trading facility incorporating a central counterparty without impacting the important relationships between banks and non-financial-institutions. The full integration of all collateral management services offered by Clearstream will lead to further optimized, transparent and consolidated collateral and liquidity management reducing collateral fragmentation and the related risks and costs, added Stefan Lepp, CEO of Clearstream Banking, Frankfurt.
(JDC)