UniCredit has become the first commercial bank to secure Eurosystem credit operations under new rules, partnering up with the National Bank of Belgium while Euroclear will act as triparty collateral agent.
Changes in Eurosystem rules allow central banks to provide liquidity through a triparty platform.
UniCredit also benefits from the abolishment of the repatriation rule, a part of the Correspondent Central Banking Model (CCBM) that required Eurosystem counterparties to realign securities to their country of issuance before they’re pledged as collateral against euro liquidity.
The changes mean that banks can reduce the costs and operational burden associated with obtaining liquidity from Eurozone central banks.
Euroclear will facilitate the pledging of securities collateral through its partnership with the National Bank of Belgium, which will act as correspondent central bank.
Jean Hilgers, director of National Bank of Belgium, said: “By using Euroclear’s triparty platform Eurozone banks will now be able to pledge eligible securities from the nine major markets with which Euroclear Bank has a Eurosystem eligible link, with the National Bank of Belgium in order to obtain liquidity from their domestic central bank.”
Jo Van de Velde, managing director and head of Euroclear’s product management division, added: “Our resilient collateral management platform will serve as the gateway for UniCredit to pledge securities collateral to the National Bank of Belgium […] without the need for cross-border realignments.”
“Furthermore, by being part of the global Collateral Highway ecosystem, UniCredit will also be able to seamlessly track and mobilise their securities collateral in a timely manner, irrespective of geographic location, to wherever it is needed in order to support regular trading activity.”
