We did it! How Clearstream reached an extraordinary market milestone

by Berthold Kracke, CEO of Clearstream Banking Frankfurt


Last weekend was by no means an ordinary one.

Yes, there were weekend morning breakfasts, coffee and orange juice, and yes, we were not in our business suits. But that was as far as it went in terms of weekend normality. The weekend saw our Group CSDs, Clearstream Banking AG (CBF) and LuxCSD, successfully migrate to the European Central Bank’s TARGET2-Securities (T2S) platform. For many colleagues, this meant spending most of the weekend out at our Frankfurt headquarters, in Luxembourg and in Prague as they set to work in shifts to implement the migration.

Aside from the colleagues working hard on their well-deserved weekend - why is this extraordinary? Because, with CBF representing around 40% of European settlement volumes, this fourth migration wave means that the majority of European settlement is now taking place on the centralised T2S platform and no longer being conducted by respective national CSDs, be it for example, for the French market, German market or Italian market.

For Clearstream, the ECB and the other CSDs involved, this brings a ten-year long project to fruition. As I have been saying to colleagues and customers, this is the start of a new era.

So I think we have every reason to pause a moment and pat ourselves on the back (even if those settlement transactions are never allowed to pause).

First, a big thanks: to our client base, ECB colleagues, and the other CSDs. We've worked hard with all of these parties over these last years to help design the project, adapt systems, engage with the market and eventually make this project work - this was team work all the way. A special thanks also to our 250 colleagues on site who made this work.

We might also wish to take a moment to recall the purpose of all of this. The big market picture and goals are to increase efficiency and reduce costs of settlement by centralising settlement via the ECB's new settlement platform. T2S is a key way in which Europe will reduce the "Giovannini Barriers" and bring about safer, more efficient and more harmonised capital markets.

Clearstream's post-T2S era will take this concept a step or two further.

While preparing for T2S, we have been working to harmonise connectivity channels, streamline our custody network and improve our asset servicing and collateral management services. We're here to provide our customers with a choice of access models allowing them to leverage both the new platform and our existing wide-ranging value added services as much as they see fit – providing them with their own tailored T2S opportunity. We are currently on target to reach our strategic goals – more customer information will follow shortly with further details, so watch this space.

In the meantime, thanks again to our customers for your support and welcome to the new era. We wish you happy instructing and settling via the new T2S setup, all while confidently looking forward to the final wave migrating in September.

Follow Berthold on LinkedIn