The European Central Bank (ECB) has set the dates in 2014 to remove the repatriation requirement and support cross-border tri-party collateral management services, both of which will improve collateral management in the Eurosystem.
First, the repatriation requirement from the correspondent central banking model (CCBM) will be removed in May 2014. As a result, Eurosystem counterparties will no longer be required to move their collateral from the investor CSD to the issuer CSD when borrowing liquidity from the Eurosystem.
“This will allow counterparties to manage their collateral holdings in a more flexible and cost-efficient manner,” says Benoît Cœuré, member of the ECB’s executive board.
Following the removal of this requirement will be the support of cross-border tri-party collateral management services in September 2014. When this goes into effect, euro area counterparties will be able to use tri-party services from an agent outside the counterparty’s own country to use for Eurosystem credit operations.
“This initiative is another way to enable counterparties to manage collateral assets more efficiently,” says Cœuré.
European Central Bank Sets Dates in 2014 to Improve Collateral Management
The European Central Bank (ECB) has set the dates in 2014 to remove the repatriation requirement and support cross-border tri-party collateral management services, both of which will improve collateral management in the Eurosystem.