Frankfurt
16 March 2017
Reporter: Drew Nicol

Brexit poses threat to CMU success, says Clearstream


Strained political relations in the EU has put the harmonisation efforts of Europe’s financial markets, such as the European Central Bank’s Target2-Securities (T2S) settlement platform, under “severe stress”, according to Clearstream.

“In order to fully harness the potential and wider benefits of such developments, we need to clear away some serious obstacles on the path to a capital markets union in Europe,” said Marc Robert-Nicoud, CEO of Clearstream, which migrated to T2S in February.

“Further alignment will be necessary of the various European regulatory initiatives with the objectives of market integration initiatives such as T2S.”

In a note to clients, the Deutsche Börse subsidiary said: “Nationalistic tendencies as well as the looming Brexit are subjecting the capital markets union project to severe stress.”

“Against the current political backdrop, it is key for policy makers and stakeholders to focus on the execution of capital markets union objectives.”

Despite this, T2S, which is currently heading towards its final wave of implementation later this year, “works perfectly”, but it’s yet to achieve its ultimate goal.

Robert-Nicoud added: “The technical integration of the European settlement systems can only be a first step.”

“Now, the integration on market level has to follow lead. This is the only way how T2S can live up to its original promise: to make cross-border settlement easier and more efficient for market participants.”

Clearstream’s successfully migration to T2S, means the platform now has more than 80 percent of its expected volume.

The T2S project is scheduled to be completed with a final wave in September 2017.

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