Source: Euroclear Bank
CajaMadrid, one of Iberia's leading financial institutions, has become the first Spanish bank to sign up for Euroclear Bank's triparty collateral management services.
By entrusting its collateral management requirements to Euroclear Bank, CajaMadrid has chosen to optimise the relationship between collateral usage and securities settlement, thereby ensuring hassle-free securities financing and improved back-office efficiencies.
Euroclear Bank offers collateral management services to support repurchas (repo) agreements, securities loans, secured loan facilities, derivatives transactions and other secured exposures. By automating the selection and substitution of securities used as collateral throughout the life of each transaction, Euroclear Bank enables clients to collateralise their exposures across multiple products, instruments and counterparties using a single collateral pool.
Commenting on CajaMadrid's decision, Olivier Grimonpont, Director and head of Collateral Services Product Management at Euroclear SA/NV, said: "We are delighted to welcome CajaMadrid as the first Spanish user of our triparty collateral management services. Their decision underpins Euroclear Bank's leading role as a triparty agent in the securities financing sector, at a time when our business has grown to unprecedented levels."
Jaime Comunión, Managing Director, Treasury, CajaMadrid, said: "Improving our securities financing activity is one of the main pillars of CajaMadrid's treasury strategy. That is why we are extremely proud to be the first Spanish entity to carry out triparty-repo deals with Euroclear Bank. Triparty repos not only allow us to optimise our financing requirements, but also present new cash-lending opportunities as well. CajaMadrid believes that this business offers great potential, and it is one that we are keen to exploit to maximum effect in the Spanish market."
As a collateral giver, CajaMadrid will benefit from optimised asset usage and access to a very wide range of counterparties in Euroclear Bank. In addition, AutoSelect, Euroclear Bank's automated collateral allocation and monitoring tool, ensures maximum efficiency in the securities selection and substitution process. And by delegating Euroclear Bank to perform further back-office functions – such as verification and eligibility checks, daily mark-to-market and a wide range of custody services - clients can generate even greater processing efficiencies.
Triparty collateral management at Euroclear Bank is growing at an annual rate of 57%, with current daily levels at a record EUR 255 billion outstanding, compared with EUR 162 billion at the beginning of 2005.
In the latest market survey carried out by International Securities Finance, the leading publication for international finance professionals, Euroclear Bank ranks first for market use of its triparty repo services in Europe. The overall rankings also place Euroclear Bank as the leading ICSD provider with top scores in settlement capabilities, automatic collateral selection, securities substitution and allocation, and reporting.