Eurex has partnered with Clearstream and VERMEG, provider of the Eurosystem Collateral Management System (ECMS), to expand the use of collateral of its leading pan-European cash-driven liquidity pool.
The collateral management solution connects the ECMS, Clearstream’s Triparty services and Eurex’s GC Pooling. Implementation of ECMS in November 2024 will provide new opportunities for collateral optimisation and mobilisation in the Eurozone through GC Pooling re-use. This includes refinancing with national central banks, collateralisation of CCP margin, and collateralisation of bilateral margin.
Frank Gast, member of the management board of Eurex Repo, said: “A unified approach to Eurosystem Collateral Management will ultimately standardise collateral management across the Eurozone, advancing liquidity, market reliability and automation potential.
“With the help of this new partnership, we will be able to realise the potential of the ECMS for all market participants and emphasise the importance of access to central bank money. Time is now for clients to prepare implementation of ECMS and to benefit from new collateral optimisation opportunities,” Gast added.
Michael Cariginano, head of markets innovation at VERMEG, said: “Together, VERMEG, Clearstream, and Eurex are forging a groundbreaking solution that will allow banks to optimise collateral allocation and leverage the most efficient operational setup. Through direct connectivity to ECMS and Clearstream, coupled with full access to collateral re-use capabilities facilitated by GC Pooling at Eurex, banks will enjoy unparalleled efficiency and flexibility in managing their collateral assets.”
GC Pooling is a pan-European cash-driven liquidity pool for secured funding with more than 160 buy and sell side firms. It offers straight-through processing with automated connectivity to Eurex Clearing as a central counterparty and real time collateral management services provided by Deutsche Börse’s post-trade business Clearstream.
The European Central Bank (ECB) is using the ECMS to harmonise the collateral management practices of national central banks across the Eurozone. Leveraging VERMEG’s collateral solution, Eurex’s clients should benefit from enhanced liquidity management and collateral optimisation, the firms said.
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