Clearstream, the custody and settlement arm of Deutsche Börse, is in talks with banks and central securities depositories in 17 markets around the world about handling collateral management for them in their domestic markets.
The move comes as better collateral management has become an urgent priority for banks facing pressure from new capital requirements under the Basel rules and as regulators from G20 countries push for greater collateralisation of over-the-counter derivatives.
It is also part of a drive by Luxembourg-based Clearstream to expand into emerging markets including Brazil, where it last month agreed with Cetip, the country’s depository services group, to jointly provide local banks with collateral management for their OTC derivatives exposures.
Last month, a survey by Accenture and Clearstream claimed that the financial sector could save $4,000bn annually by making collateral management more efficient. Collateral management is underdeveloped in many countries, yet their banks have increasing need for the service, according to Jeffrey Tessler, chief executive of Clearstream.
He said that since the Cetip deal in June and after Clearstream and ASX, the Australian exchange and clearing group, last month entered exclusive talks about developing collateral management for Australia, he had been contacted by other depositories around the world.
“I have not called one of them, they have all called me,” Mr Tessler said in an interview at the Sibos asset servicing conference in Toronto last week. “We want to be able to link all these infrastructures, as they are sitting on all these pools of capital.”
Clearstream has forged closer ties with securities depositories in other “Bric” countries, including Russia.
Clearstream rival Euroclear is set in November to launch collateral management services in Belgium, France and the Netherlands.
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