Copying and distributing are prohibited without permission of the publisher
Clearstream links up with Norway CSD
06 February 2014
Endeavour to develop collateral management solution for Norwegian market
Verdipapirsentralen ASA (VPS), Norway’s central
securities depository (CSD) and Clearstream have joined forces
to develop a collateral management solution for the local
The two firms have signed a letter of intent with the aim of
offering Norwegian market participants to use collateral to
cover domestic exposures. Norway is the first Scandinavian
market to sign up to Clearstream’s global
collateral management model.
"The regulatory agenda requires banks and financial
institutions to better manage their capital and liquidity
buffers. An efficient local and global collateral management
service will become a must going forward," said Stefan Lepp,
member of the executive board and head of global securities
financing at Clearstream.
VPS would offer collateral management services on a
white-labelled basis through Clearstream’s
collateral management hub. Assets remain on accounts in the
local market environment, which avoids creating new systemic
risks and helps to meet regulatory requirements in many
domestic markets globally.
John-Arne Haugerud, CEO at VPS, said: "From a risk perspective,
it was particularly important that the underlying assets do not
leave the Norwegian jurisdiction and this is guaranteed under
the Liquidity Hub GO service. The Global Liquidity Hub offers
more than a domestic solution and we will explore this
potential along our journey with Clearstream."
The firms said that the partnership would help Norwegian
financial institutions and VPS customers to overcome internal
collateral fragmentation across systems.
Collateral management is becoming an increasingly important
topic amid fears over a potential shortage of collateral.
A 2011 report by Accenture revealed that financial services
could collectively save more than €4bn each year by
addressing operational collateral management inefficiencies:
decentralised operations and unaligned business objectives are
limiting the ability of banks to manage collateral efficiently
on a local and global basis.