Euroclear’s Collateral Highway grows 12 percent to EUR 787 billion in 2013
Brussels, 21 January 2014 – Euroclear’s global Collateral Highway enjoyed phenomenal growth in 2013, with average daily collateral outstanding on it climbing from EUR 700 billion at the end of 2012 to over EUR 787 billion at the close of 2013, with peaks of up to EUR 830 billion in the second half of the year. This 12 percent increase on the Collateral Highway – which allows users to seamlessly source and mobilise their securities irrespective of location in order to cover trading exposures and to access central bank liquidity – comfortably eclipsed annual growth figures reported by other collateral management service providers.
Tim Howell, Chief Executive Officer of Euroclear, commented: “I am delighted by the tremendous growth witnessed on Euroclear’s Collateral Highway, both in terms of the billions sourced and mobilised every single day for our participants, and also the many additional clients and partners we have welcomed on board in 2013. The success enjoyed by the Collateral Highway is an endorsement of Euroclear’s strategy to focus on providing friction-free mobility of assets globally which can then be allocated optimally to key liquidity providers, such as central banks and risk-mitigating central clearing counterparties (CCPs). The increased traffic on the Collateral Highway justifies our multi-year investment plan to deliver an open market collateral management infrastructure solution.”
Since its inception in July 2012, the global Collateral Highway has successfully reached several important milestones. CCP take-up on the Collateral Highway has been one of the highlights of 2013 with eight CCPs now active across the globe. These include CME, ICE Clear, LCH.Clearnet and, most recently, the Dubai Commodities Clearing Corporation. CCPs and their General Clearing Members benefit from the Collateral Highway as it allows initial margin to be posted in an efficient, low-risk and fully automated manner.
However, the biggest growth in collateral traffic came from financial institutions increasingly accessing collateralised liquidity from central banks assembled on the highway. A key driver in bringing central banks and major CCPs to the Collateral Highway was the horizontal model operated by Euroclear. As a neutral and systemically important financial market infrastructure Euroclear is fast becoming the preferred, and often only, partner in the provision of global liquidity and collateral management services for capital market participants. The profit-constrained model under which Euroclear operates also means that financial institutions on the Collateral Highway enjoy the lowest costs of any service provider in the world.
Note to Editors
Euroclear Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds. Serving major financial institutions located in more than 90 countries, Euroclear Bank, based in Brussels, is part of the Euroclear group. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor’s.
Euroclear is the world’s largest provider of domestic and cross-border settlement and related services for bond, equity, derivatives and fund transactions. The Euroclear group includes Euroclear Bank, based in Brussels, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. The Euroclear group settled the equivalent of EUR 542 trillion in securities transactions in 2012, representing 159 million domestic and cross-border transactions, and held more than EUR 23 trillion in assets for clients.