The Liquidity Alliance was established in January 2013 with the aim of providing a platform for CSDs to collaborate on collateral management. It gives members an opportunity to exchange information, identify common needs and extend global collateral solutions while encouraging the development of informed research.
The Liquidity Alliance was formed in response to the growing need for collateral due to the regulatory overhaul following the financial crisis. There are fears that there might not be enough collateral around the globe to cover all evolving exposures, especially as various studies revealed that most financial institutions suffer from collateral fragmentation and have no internal overview of their collateral pools.
CSDs and other market infrastructures are particularly well placed to address the global collateral shortage by optimising the usage of collateral pools on a short time-to-market basis. Clearstream's collateral management system is the solution of choice of The Liquidity Alliance members, as it enables the collateral to stay in their domestic markets.
The Liquidity Alliance members meet regularly to discuss key developments, to identify business opportunities in collateral management and to share individual market experience while also promoting studies and industry research.
The fact that The Liquidity Alliance members are from different regions of the world brings together a unique pool of global insight and expertise that is expected to be a trusted source of valuable information. The members embrace open architecture and are therefore looking forward to welcoming new members in the future.