Triparty collateral services (CmaX)

01.09.2016

Clearstream’s award-winning triparty collateral services offer you the safekeeping and monitoring of securities that are held as collateral to cover exposures of any bilateral principal agreement.  As a neutral collateral agent, Clearstream handles all the allocation, optimisation and substitution in straight-through processing and in real time.

Many organisations have no overview of their collateral. Inefficiencies in banking collateral management systems can prevent the consolidation of collateral pools: both within organisations and externally across multiple locations. Up to 15% of collateral available to financial institutions is left idle, costing the global industry more than EUR 4 bn a year, according to a study by Clearstream and Accenture in 2011.

This means institutions cannot monetise all their available collateral, which can limit their operations and force them to search for increasingly expensive unsecured funding. Clearstream’s Global Liquidity Hub helps customers to overcome this fragmentation and cover all their exposures from a single collateral pool.

A 2014 study by Clearstream and Elton-Pickford found that European banks could reduce their Basel III equity capital requirements by up to 20%, equivalent to EUR 40 bn, through collateral optimisation as offered by the Global Liquidity Hub.

Triparty collateral services under the Global Liquidity Hub include:

Clearstream’s collateral management system allows a high degree of flexibility, enabling more than 550 participants to customise the services they receive, in accordance with their individual regulatory and business requirements. In addition to supporting our internal customers, our system is powerful enough to also provide collateral links to external partners such as agent banks, trading platforms and CSDs. For example, the Global Liquidity Hub is the collateral management system of choice of The Liquidity Alliance.