Euroclear Bank SA, a securities depositary that safeguards more than $33 trillion of client assets, has extended the collateral-management system it operates with BNP Paribas SA (BNP) to four new markets.
The service from BNP Paribas Securities Services, which has more than $8 trillion of assets under custody, and Brussels-based Euroclear enables banks and brokers to identify equity and fixed-income securities that they can use as collateral to back trades. Clients in Germany, France, Belgium and the Netherlands can now use the system, Euroclear said in an e-mailed statement today. Banks in Italy and Spain starting using it last year.
Euroclear, one of the two largest settlement houses in Europe, calls its service the Collateral Highway.
Financial institutions have sought to better manage their collateral as regulators around the world have pushed more over-the-counter derivatives trades through clearinghouses in the aftermath of the financial crisis in 2008. As demand for collateral increases, custodians such as BNP Paribas, which safeguard assets for other institutions, and central-securities depositories such as Euroclear, which register and settle securities, have offered new services.
“Our partnership with BNP Paribas, which now spans six European capital markets, is part of the ongoing extension of the Collateral Highway to more markets globally,” Frederic Hannequart, Euroclear Bank’s chairman, said in the statement.
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