UniCredit Connects to Euroclear for Triparty Collateral Pledge
This industry first takes advantage of the recent changes in Eurosystem rules that allow central banks to provide Eurosystem liquidity via a triparty platform.
UniCredit will connect to Euroclear to facilitate the pledging of securities collateral to the Eurosystem central banks, using its triparty platform to pledge eligible securities from the nine major markets with which Euroclear Bank has a Eurosystem link.
The European Central Bank (ECB) recently implemented changes to the Euorsystem rules in order to reduce collateral fragmentation and operational risk across Europe. Firms are now allowed to use tri-party collateral services for cross-border pledges to national central banks in the Eurosystem.
The National Bank of Belgium will therefore be able to connect to Banca Italia to provide cash liquidity on behalf of UniCredit.
"We greatly appreciate the results of this joint effort with Banca d'Italia, the National Bank of Belgium and Euroclear Bank," says Massimiliano Sinagra, co-head of UniCredit Group treasury. "This agreement will help UniCredit reduce its operational risk and lower the cost of pledging collateral to Banca d'Italia in exchange for cash. By using Euroclear's proven triparty infrastructure, UniCredit will be able to pledge securities through the National Bank of Belgium, which will liaise directly with Banca d'Italia, in order to provide the bank with cash liquidity."
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