The Bundesbank will grant intraday credit against collateral as part of Clearstream Banking, Frankfurt (CBF) night-time processing. Participants will be able to use the self-collateralization service to optimize the management of their central bank liquidity for the CBF night-time processing and make up for any liquidity defaults by counterparties. The new service is based on existing CBF processing methods and can be used by customers without functional adjustments.
The service will be available to credit institutions which are both CBF customers and monetary policy counterparties of the Bundesbank or which are counterparties that act as a correspondent bank for CBF customers in the cash settlement of securities trading business.
Hans Fabritius, member of the executive board of the Deutsche Bundesbank, said: With the self-collateralization service, the Bundesbank is enhancing the options for providing intraday liquidity. Credit institutions can thereby reduce the extent of advance financing for settling certain securities purchases in Clearstream’s night-time processing. Self-collateralization therefore makes an important contribution to efficient securities settlement on the financial market place by providing a higher level of flexibility for credit institutions’ liquidity management.
