Clearstream has agreed to develop a customised triparty collateral management solution for Deutsche Bank and its customers, the latest bank to sign up to the central securities depository (CSD).
The deal follows similar agreements with BNP Paribas, Citi and Standard Chartered and will boost Clearstream’s collateral under management which was €626.9 billion as of June this year.
Through a single collateral pool, Deutsche Bank customers can consolidate their collateral holdings to cover their global exposures more efficiently.
Deutsche Bank customers will retain their asset portfolios within the bank’s network, and Clearstream’s collateral management engine will carry out collateral management functions such as automated and real-time allocation, optimisation and substitution.
The need for collateral has increased on a global scale with firms now requiring it to cover their OTC derivatives risk and meet regulatory mandates.
“On the one side, our collateral strategy is about linking to ever more exposure locations such as clearing houses and central banks,” said Stefan Lepp, Member of the executive board and head of global securities financing at Clearstream.
“On the other side our strategy is to provide access to a growing number of collateral locations such as central securities depositories, stock exchanges and agent banks.”