Clearstream and Deutsche Bank have signed an agreement to develop a customised triparty collateral management solution that Deutsche Bank can offer to its customers.
The cooperation will allow Clearstream to further increase its collateral under management (EUR 626.9 billion in June 2014) with additional Deutsche Bank liquidity; Deutsche Bank's customers will be able to leverage the integrated suite of triparty collateral management services that Clearstream offers via its Global Liquidity Hub.
This single and optimised collateral pool will enable Deutsche Bank customers to consolidate their collateral holdings to cover their global exposures most efficiently. While Deutsche Bank customers retain their asset portfolios within Deutsche Bank's extensive custody network, Clearstream's collateral management engine carries out complex collateral management functions such as automated and real-time allocation, optimisation and substitution. A unique feature of Clearstream's collateral service for agent banks is that it mobilises collateral in real time and only up to the amount that is required.
Stefan Lepp, Member of the Executive Board and Head of Global Securities Financing at Clearstream, said: "On the one side, our collateral strategy is about linking to ever more exposure locations such as clearing houses and central banks, and on the other side our strategy is to provide access to a growing number of collateral locations such as central securities depositories, stock exchanges and agent banks. We are pleased to help Deutsche Bank with our collateral management technology while in return we can offer our customers access to the large liquidity pool of Deutsche Bank."
Improving access to collateral is seen as a crucial issue for the financial industry at a time when the regulatory agenda drives demand for optimisation as well as adequate levels of capital and liquidity. Clearstream has already created access to several global liquidity pools by working with international strategic partners like Cetip (Brazil), ASX (Australia), Strate (South Africa), Iberclear (Spain) and BNP Paribas. Collateral management partnerships with Citi and Standard Chartered will go live this year and further developments are underway with CDS (Canada), SGX (Singapore) and VPS (Norway).