Pledge to central banks

Acting as a neutral agent and market infrastructure, Clearstream facilitates access to central bank operations thereby supporting its clients to manage risks and liquidity. As part of our triparty collateral management services, clients 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 are operated via the Banque Centrale du Luxembourg (Luxembourg central bank) (BCL) and the Deutsche Bundesbank (German central bank).

In addition to central bank borrowing in EUR, Clearstream also supports USD and SGD central bank liquidity via collateral pledges to the Federal Reserve Bank of New York (New York Fed) and the Monetary Authority of Singapore (MAS). Clients can leverage Clearstream’s services to secure different discount window USD borrowings at the New York Fed and USD/SGD borrowings at the MAS.

In order to benefit from central bank credit lines, clients must first be deemed eligible by the BCL, Deutsche Bundesbank, the New York Fed or the MAS, 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 clients 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.