Cross Border Collateral Arrangements

Cross Border Collateral Arrangements

1. Key factors influencing the demand for cross-border use of collateral

   • The current environment: central banks, internationally active banks, markets and infrastructure
     • Central banks
       • cross-border
       • foreign-owned
       • settled/hel
       • exceptional circumstances
     • Eligible collateral in the G10
       • the G10 markets
       • the Swiss National Bank
       • the Bank of England
       • large-value payment system
     • Market infrastructures
       • international central securities depositories
       • central securities depository
       • branch or subsidiary
   • Offsetting factors
     • mainly based on SWIFT technolog
     • STP
     • portfolio-based margining
     • RTGS
   • Evolutionary factors, risk management and the market microstructure
     • CLS
   • Internationally active banks
     • Cross-border collateral arrangements
     • (ie self-clear
     • through a local branch or subsidiary
     • globally integrated
     • La centralización de la liquidez enfoque de gestión / garantía
       • Fully centralised
       • Partially centralised
       • Decentralised
         • Institutions

2. Policy considerations

   • Global systemic risks
     • Cross-border
     • global financial crises - a problem
       • bank accepts the other’s local collateral
     • with centralised liquidity and collateral management
     • cross-border use of collateral
   • Monetary policy
     • lombard
     • limitar dichos riesgos
     • las operaciones de los bancos centrales nacionales
       • failed counterparty
       • portfolio impact
     • counterparty default
   • Smooth functioning of payment and settlement systems
     • time-critical payments
       • significant liquidity needs
       • multiple systems
     • foreign collateral
     • Emergency-only cross-border use of collatera
   • Effect on competition
     • financial market
     • Effects on individual institutions and correspondent banking
       • esulting change in market structure
     • Effects on the currency area
     • Effects on financial markets
   • Legal constraints
   • Other constraints for central banks
     • described in previous sections
     • for foreign reserve management
     • operational and financial

3. Arrangements for the use of foreign collateral in intraday/overnight credit operations

   • Five stylised arrangements for the use of cross-border collateral
     • collateral management system
     • correspondent central banking model
     • models of remote access to an SSS
     • another central bank as in the
   • Correspondent central banking model
     • United Kingdom
       • Bank of England
       • Counterparty A
     • United States
       • FRBNY
       • Fedwire Securities
       • Custodian
   • Guarantee model
     • Country A
       • HCB
       • Counterparty
     • Country B
       • CCB
       • SSS B
       • Custodian
   • Links between securities settlement systems
     • Country A
       • SSS A
       • Counterparty A
       • HCB
     • Country B
       • SSS B

4. Potential central bank actions

   • Areas for potential cooperation and coordination among G10 central banks
     • Place of the Relevant Intermediary
   • Acceptance of additional categories of foreign collateral
     • the associated assessment methodology
   • Improving cross-border collateralisation practices
     • Legal issues
     • The availability of systems
   • Promoting interoperability
     • Typically
     • order to generate intraday liquidity
     • market participants need to access