The future of funding and financing: Faster, safer and more efficient

by Philippe Seyll, Co-CEO of Clearstream Banking

25.01.2017

In today’s world with its cross-linked international markets and new technologies, the foundation has been laid for a fast expansion of trades and substantial capital growth. One of the major challenges today is to stay ahead of the complexity and speed of the system we created. New structures and technical means provide fresh impetus and new momentum to our evolution. There are always ways in which things can be handled more efficiently, faster, and at the same time in a safer way, right?

In our specific corner of the world, we have a comprehensive catalogue of products and innovations which are the subject of the Global Funding and Financing (GFF) Summit currently underway in Luxembourg. What used to be the Global Securities Financing Summit has become a key global event for the securities industry and will now – with a new, extended vision – reflect the ongoing alignment of Deutsche Börse’s secured funding and securities financing activities in a combined and optimised way. What this means in practice is a fundamental change in the way in which Deutsche Börse as a group delivers services like repo, collateral management and securities lending. Recent innovations based on this combination have included holistic repo services for buyside customers, complemented by new agency lending services via our CCP, Eurex Clearing.

Another big topic for the GFF summit this year comes as we arrive at the doorsteps of TARGET2-Securities (T2S). T2S will set the stage for a new era of the European financial markets, as it lays the ground for greater efficiencies. After Clearstream joins the platform, we will begin rolling out full triparty interoperability between Clearstream’s Central Securities Depository and the International Central Securities Depository, which will allow customers to pool all their assets, including equity, at Clearstream’s CSD in Germany.

In a former blog I already mentioned that new regulations like EMIR and measures like central banks acquiring over EUR 1 trillion of government debt under the European Central Bank’s Public Sector Purchase Programme (PSPP) were designed to stabilise the post-crisis financial sector. The Global Funding and Financing services provided by our group work in this context to offer solutions to prevent further instabilities: GFF offers a suitable holistic suite of solutions for the collateral management of OTC derivatives in the new regulatory environment as well as for the re-injection of securities into the market via repos and securities lending.

Combining all these products and solutions under the roof of GFF helps to reduce complexity on all sides. On this basis, we can venture to discover even more sophisticated technologies like Distributed Ledger Technology, to name only one example. I see great potential for rendering our world faster, more efficient and safer – providing benefits both to customers and to market stability.