A significant majority (70%) of local market participants in the Central and Eastern Europe (CEE) region polled at an industry event said they have still had a long way to go to be ready for TARGET2-Securities (T2S), the harmonized settlement platform for Eurozone securities.
Only 7%, out of more than 100 delegates drawn from the CEE and Commonwealth of Independent States (CIS) banking community including commercial banks, central banks, CSDs, mutual and investment fund managers cited T2S as their ‘No 1’ market reform priority compared to 39% citing it as being in their ‘Top 5’ priorities. 41% meanwhile reported T2S was “on the radar” but they had not yet fully assessed it in terms of their business.
Delegates gathered at Clearstream’s CEE Summit in Prague this week to exchange views and sentiment concerning the capital markets in the region and challenges they face in the coming months and years. The voting results are in line with preliminary results of a Clearstream study based on research with customers, indicating that financial institutions across Europe do not yet have T2S readiness amongst their top priorities.
Speaking at the CEE Summit, Philip Brown, member of the Executive Board, Clearstream, said “Central Eastern European market at risk of missing boat for TARGET2-Securities business opportunity”: It is encouraging to witness confidence in the region’s economic outlook – the CEE region has been of increasing economic importance over past years, as reflected in the growth in its Eurobond market activity. Enabling a smooth transition for the CEE region to the future T2S platform is critical to helping the region maintain its momentum and reap the opportunities T2S brings, especially for collateral management.”
Polling sessions also revealed that 83% of Summit delegates anticipate growth in the region’s debt capital markets between now and 2020. 50% of participants anticipate this growth will be via issuances on the international market compared to 33% per cent on the domestic market, highlighting that both international and domestic issuances will play an important role moving forward. Overall, these results offer a positive outlook for the region’s growth in debt capital markets.