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Collateral managed via Clearstream’s Global Securities Financing (GSF) services have broken the € 400 billion mark for the first time in May illustrating the growing importance of secured financing and the continued flight of collateral towards central liquidity pools.
In May 2008, monthly average outstandings within Clearstream’s Collateral Management System peaked at a record high of € 415 billion. The combined services, which include tri party repo (1), securities lending and collateral management collectively experienced a rise of 29 % compared to May 2007. For the first five months of 2008, the combined GSF outstanding raised 18 % compared to a raise of 10 % in the first five months of 2007.
For Stefan Lepp, Member of the Executive Board, Clearstream Banking Frankfurt and Head of Global Securities Financing, “This trend continues unabated and reflects the fact that our new products and services are being well received by the market. It also confirms that we have made the correct decisions to extend our award-winning collateral management services and introduce new liquidity channels for our clients.
With its integrated trading, clearing, settlement/custody and collateral management structure, Deutsche Börse Group is already in a position to offer the centralized liquidity hub that institutions need to operate efficiently in the current and future market environment. We will continue to design further collateral management services in response to the fast changing market conditions to ensure that our clients have access to the most comprehensive and secure liquidity solutions available.
(1) Repo trading allows banks to lend/borrow their security holdings in exchange for money and receive or grant liquidity as a result. The ECB and the majority of national European central banks use repo transactions to control money supply.
