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Thought leadership: Richard Glen, Clearstream

06 June 2014

Richard Glen, head of GSF Sales and Broker-Dealer Relations, UK, Ireland & Americas, discusses how partnerships are helping Clearstream to improve access to collateral and liquidity

Read more: Richard Glen Clearstream

Clearstream has provided infrastructure solutions for collateral management for over 20 years. What are the key lessons you have learned?

Since the onset of the financial crisis in 2007, collateral has become much more important for members of the financial community and infrastructure has played a key role as the bedrock of financial stability.

Our experience in the aftermath of the crisis in Europe has produced some significant benchmarks in the way collateral can be managed efficiently and cost effectively. This includes our work with Eurex Clearing’s GC Pooling service as well as using our tri-party product to mobilise collateral with ease at the Bundesbank and the Federal Reserve Bank of New York.

A number of other infrastructure providers have sought guidance and advice as to what we’ve done and how we’ve done it and, with our assistance, have looked to replicate these arrangements in their home markets.

What are the current trends?

The industry is becoming more global in terms of where collateral, settlement, liquidity and asset servicing needs are managed. More and more counterparties want the possibility of using their assets across different time zones and locations and we are moving towards a 24/7 real-time, transaction management environment.

Infrastructure, technology and specifically the speed of settlement processes need to be adapted accordingly. Another trend we are seeing centres around resourcing and costs. Budgets are getting tighter so customers don’t want to embark on a 5 or 10-year programme of building in-house technology.

They would prefer to work with a reliable partner on a 12 to 18-month implementation timetable and to have the infrastructure up and running as quickly as possible. This allows them to start earning revenue earlier and therefore make a quicker return on their investment.

How are you working with market participants to cater for these trends?

Clearstream caters for institutions with specific local requirements, as well as those who are globally focused. We service broker-dealers who take a very holistic view of how they want their business and assets to be managed.

We need to look beyond traditional domestic or regional boundaries to understand exactly what implications their demands have in terms of our business model, systems and processing.

Having said that, we also need to be very astute and aware of specific local needs. The success of our franchising arrangements with our Liquidity Hub GO and Connect initiatives lies in the collaboration of highly skilled implementation teams with local market partners. They handle the specific local customs and nuances relating to collateral and help deliver the right technology environment for that market.

Where would you say Clearstream excels in adding value to your partnerships?
First, I would say that customers value ourability to work in partnership not just with their teams, but also with vendors and other infrastructure providers, based on our expertise and experience in collateral management.

Second, Clearstream has a sound reputation for innovation, specifically in terms of the product and service focus and the way that we roll out and manage technological upgrades in a consistent manner. As a company, we have always tried to be flexible around what customers are asking for and we are willing to look into solutions that will make things better and make our customers lives a lot easier.

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