In the new model, which was designed in close cooperation with market participants and federations, buyer of securities secure transactions with liquidity held on their Bundesbank account. The resulting elimination of unwinding risk that could arise from the default of a counterparty greatly contributes to the stability of the financial markets.
"Clearstream has brought the clearing standards for the German market in line with international rules and regulations in close cooperation with the Bundesbank and market participants," said Matthias Ganz, CEO of Clearstream Banking AG. "The whole market benefits from risk-free securities clearing and settlement."
In the first phase, which has been under way since November 14, this settlement model is valid exclusively for night-time processing. In subsequent steps, the model is to be expanded to daytime processing and the link established to further central banks.