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ECB liquidity injection

ECB liquidity injection

Easier sourcing of central bank funding resulting from two European Central Bank (ECB) initiatives launched in September 2014 is set to have a significant impact on banking collateral management activities and significantly boost triparty services in the Eurozone

The increased supply of liquidity in the market fuelled by both the ECB’s Targeted Long-Term Refinancing Operations (TLTRO) and the revised CCBM is expected to drive demand for collateral management services as banks shift towards global specialists who can carry out sufficiently sophisticated inventory mobilisation, optimisation and full mark-to-market daily margin management.

The changes in CCBM rules enabling banks to use triparty services for the first time when gaining cross-border central bank financing will also drive efficiency into the process as the agent takes on the burden of all the administration of the collateral mobilisation, optimisation and margin management in a completely secure environment.

This article was also published in The Banker magazine.

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"Having such good visibility over liquidity access offers a rare post-crisis luxury for Eurozone banks  and should encourage market players to ensure they have adequate liquidity management and collateral optimisation capabilities"

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