Pledge to central banks


Clearstream’s ICSD in Luxembourg facilitates access to central bank operations. Customers can use their eligible assets, either for monetary policy operations, or to obtain intraday liquidity in TARGET2, the Eurosystem payment settlement system. Our pledge facilities for central bank borrowing in EUR under the Global Liquidity Hub are operated via the Banque Centrale du Luxembourg (BCL), the Luxembourg central bank.

In addition to central bank borrowing in EUR, Clearstream also offers comprehensive services for accessing USD central bank liquidity via collateral pledges to the Federal Reserve Bank of New York. Customers can use this service for central bank discount window borrowing, and to participate in tender offers and auctions.

In order to benefit from central bank credit lines provided by this service, customers must first be deemed eligible by the BCL or the Federal Reserve Bank of New York, as appropriate. Clearstream acts as a neutral triparty agent throughout the collateral management lifecycle: from instruction matching to collateral allocation, valuation and substitution. The principal relationship remains between the central bank and the borrower.

In addition to domestic central bank pledge services, Clearstream facilitates cross-border triparty services in line with the Eurosystem model. Under this model, BCL either acts as the national central bank for domestic Luxembourg counterparties or as the corresponding central bank on behalf of other home central banks. For Clearstream customers in the euro area, this means that they can post collateral to their national central bank via the ICSD’s triparty collateral management services and pledge securities to the BCL.