Integrated central bank collateral management services

Transcription

1 Integrated central bank collateral management services Alessandro Bonara (ECB) Richard Derksen (DNB/CCBM2 Project) Cogesi, 22 November

2 What s coming up Move towards integrated collateral management services A closer look into CCBM2 features Project Status 2

3 What s coming up Move towards integrated collateral management services A closer look into CCBM2 features Project Status 3

4 Mobilising Collateral With the introduction of the euro, mechanisms were needed to mobilise collateral cross-border Market Solution - eligible links between SSS Eurosystem Solution - Correspondent Central Bank Model Limited number of eligible links Set of procedures for NCBs EUR billion Domestic Cross-border 100% 80% 60% 40% Domestic Links CCBM Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec billion 20% 0% billion Strong increase in use of CCBM 4

5 Existing solutions: main channels CCBM is the main channel for transferring cross-border collateral Collateral mobilised: Domestically 88% 49% 61% Cross-border 12% 51% 39% of which: CCBM 11% 40% 26% Links 1% 11% 6% Direct access 7% (to a non-domestic SSS) 5

6 Current framework for collateral delivery Bank Country A Request for Credit Transfer Instruction Delivery of Collateral Release of Credit Release of Credit Request for Credit Matching NCB Country A Receipt CCBM messa ge NCB Country B Cash account Bank in Country A Confirmation 6 CSD-A Central Securities Depository Transfer Instruction Collateral Confirmation Delivery of Matching CSD-B Central Securities Depository 6

7 Existing solutions: current shortcomings Increased cross-border use emphasises drawbacks Dec billion facilities for mobilising collateral differ across euro-area Dec billion CCBM involves different players which follow varying procedures, complexity impacts on efficiency, e.g. processing time Collateral transferred via CCBM collateral management in Eurosystem technically decentralised inconvenient for multi-country banks Therefore: CCBM2 (Collateral Central Bank Management) 7

8 The CCBM2 project CCBM2 will bring a joint collateral management system for the NCBs technical consolidation one technical platform harmonisation efficiency gains faster processing a single procedure for banks mobilising domestic and cross-border collateral 8

9 Introducing CCBM2 Harmonised procedure for domestic and cross-border use of collateral Bank Country A Request for Credit Transfer Instruction Delivery of Collateral Matching Release of Credit CSD Central Securities Depository Confirmation Cash account Bank in Country A 9 9

10 What s coming up Move towards integrated collateral management services A closer look into CCBM2 features Project Status 10

11 The CCBM2 principles central bank IT platform for the collateral management for Eurosystem credit operations, complying with the decentralised access to credit fully compatible with T2 and T2S i.e. with the communication interfaces and securities settlement procedures of T2S domestic & cross-border, pooling & earmarking, repo & pledge for all eligible collateral real-time straight-through processing No more repatriation requirement able to use all eligible SSS and eligible links between SSS 11

12 A closer look at CCBM2 Message Router Counterparties NCBs CSDs / SSSs Data providers Securities Funct. CCBM2 Message Router A2A & U2A Interfaces Mandatory Work flow Manager Support Functions Monitoring & Reporting TARGET2 Securities Credit claims Funct. External Collateral Management Systems NCB proprietary Collateral Management Systems Securities Module Mobilisation Corporate Actions Credit & Collateral Module Pooling Earmarking Credit Claims Module Recording Mobilisation Static Data Application Reference Data Eligible Collateral Database TARGET2 Credit & Collateral Functionality collateral position = value of assets global position credit position = outstanding credit 12

13 What does CCBM2 contain? Message router functionality Handles communication: internally and with external parties Supports different communication networks (SWIFT, secure internet) Securities functionality Mobilisation/de-mobilisation of marketable assets, domestic/cross-border and related custody services Credit claims functionality Recording and mobilisation of credit claims Credit and collateral functionality Management of counterparty s collateral positions Assigns each counterparty a global position Optional functionalities 13

14 CCBM2 message router 3 Main Parts: A2A Interface Message Router U2A Interface A2A interface U2A interface Work flow manager Workflow Manager 14

15 CCBM2 securities functionality one system for all collateralisation techniques pooling and earmarking repo and pledge harmonised SWIFT messages for counterparties respecting required (I)CSD formats improved monitoring and reporting possibilities for NCBs and counterparties 15

16 CCBM2 credit claims functionality Non-marketable assets data management Credit claims (de-)mobilisation Custody related activities Legal requirements 16

17 CCBM2 credit and collateral functionality Global position per counterparty View on global collateral & credit position Bank A Collateral Collateral Position Securities Credit Claims Other collateral (e.g. tri-party) TOTAL COLLATERAL Credit Credit Position Open Market Operations Marginal Lending Other Credit (e.g. TOTAL Guarantees) CREDIT Remaining Credit Line = COLLATERAL CREDIT = available intraday credit 17

18 Special features in CCBM2 use of collateral for joint purposes e.g. guarantees collateral pooling global view on global positions of entities of the same group integration with existing market solutions Tri-party collateral management services, including cross-border support of auto-collateralisation procedures in current CSD/SSS infrastructures and in T2S 18

19 CCBM2 and tri-party collateral management services Third party (ICSD) acting as an agent for both collateral taker (Eurosystem) and collateral provider (counterparty). Collateral taker and provider enter into an agreement with triparty agent on the Contractual relationship counterparty Triparty agent agent (I)CSD (I)CSD Contractual relationship Contractual relationship level Delegation of outsourcing of tasks to third party could take different forms and include e.g. eligibility checks/screening, valuation, margin and haircut facilities, automatic collateral allocation and substitution, monitoring and reporting joining NCB Triparty arrangement with CCBM2 (domestic dimension) The three existing variations in the euro area will be facilitated by CCBM2, including the cross-border use. CBF/XEMAC, CBL/CmaX and Euroclear Group/Autoselect 19

20 Removal of Repatriation Requirement Combination of CCBM and Links will be accommodated for in CCBM2 With the removal of the repatriation requirement it will no longer be necessary to move assets from the investor SSS to the issuer SSS to get Eurosystem credit Country A NCB A counterparty CCBM Country B NCB B Issuer SSS assets Country C Investor SSS assets Counterparty in country A holds assets in SSS C which were issued in SSS B Repatriation to SSS wher collateral was issued Keep collateral in the (I)CSD of the counterparties choice Facilitate same-day settlement in a cross-border context Cost efficiency gains for counterparties Country A NCB A counterparty CCBM under Country B Issuer SSS Eligible link must exist Country C NCB C Investor SSS assets 20

21 What s coming up Move towards integrated collateral management services A closer look into CCBM2 features Project Status 21

22 Project status Governing Council 15/09/2010 approved 2 CBs offer and committed participation NCB Yes/ No Message Router Securities Credit and Collateral Credit Claims Národná Banka Slovenska Yes X Banca d'italia Yes X X X Banco de Portugal Yes X X X X Banco de España Yes X X X X Bank Centrali ta' Malta Yes X X X X Banque de France Yes X X X X Central Bank of Cyprus Yes X X X X Banka Slovenije Yes X X X X Bank of Greece Yes X X X De Nederlandsche Bank Yes X X X X Banque centrale du Luxembourg Yes X X X X Central Bank of Ireland Yes X X X X Suomen Pankki Yes X X X X Deutsche Bundesbank Yes X X X Nationale Bank van België Yes X X X X Oesterreichische Nationalbank Yes X X X X 22

23 CCBM2 Milestones Business requirements document Eurosystem acceptance test Counterparty certification Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Detailed system requirements CSD testing Wave 1 migration Wave 2 migration Interface guide User interface guide 23

24 CCBM2 functions - Interface guide description of messages and files to be exchanged between CCBM2 and external parties CCPs external collateral management systems third party custodians CSDs counterparties harmonising SWIFT messages for counterparties, respecting required (I)CSD-formats 24

25 CCBM2 functions - Interface guide What will it contain? messages related to mobilisation/demobilisation of (non-)marketable assets messages related to corporate actions messages and files related to triparty collateral management monitoring and reporting 25

26 How will stakeholders receive information? Main Communication Channel is decentralised to the NCBs business relationships with CSDs and counterparties local practise of national Information Desks or creation of User Groups organise and co-ordinate national activities of testing and migration General information sessions for market participants organised to introduce deliverables of general interest, and/or at key project milestones revamp the CCBM2 website (in the coming weeks) 26

27 Summary The move towards integrated collateral management services The Eurosystem magic triangle Central Bank Money Credit line adjustment auto-collat. information Mobilisation of securities 27

28 Thank you for your attention! Questions? 28