Luxembourg: Financial Sector Assessment Program: Detailed Assessment of Observance-Assessment of Observance of the CPSS-IOSCO Principles for Financial Market Infrastructures: Clearstream Banking Luxembourg

IMF Staff Country Reports, August 28, 2017

Source details

Canonical URL

Luxembourg: Financial Sector Assessment Program: Detailed Assessment of Observance-Assessment of Observance of the CPSS-IOSCO Principles for Financial Market Infrastructures: Clearstream Banking Luxembourg

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Published: August 28, 2017
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484316825.002

Summary

• This report assesses the risk management practices of Clearstream Banking Luxembourg (CBL) based on the Committee on Payment and Settlement Systems–International Organization of Securities Commissions (CPSS-IOSCO) Principles for Financial Market Infrastructures.
• The findings reveal that a range of principles are in broad observance.
• A key priority identified is to reduce CBL dependence on commercial banks in its daily operations.
• There is significant dependence on a limited number of depository and cash correspondent banks, in particular for the US and UK markets.

Key Findings

• Range of CPSS‑IOSCO Principles: A number of principles are assessed as being in broad observance.
• Concentration risk: Significant reliance on a limited number of depository and cash correspondent banks.
• Market-specific vulnerability: Dependence is particularly notable for the US and UK markets.
• Operational focus: Risk management practices are the primary assessment focus.

Policy Recommendations and Mitigants

• Reduce dependence on commercial banks in daily operations.
• Mitigation options explicitly identified:
  • Increase the number of contracted banks.
  • Where possible, establish direct links with local central securities depositories and central banks.

Subjects and Keywords

• Subjects: Banking, Credit, Currencies, Financial institutions, Financial regulation and supervision, Money, Operational risk, Securities
• Keywords: CBL finality rule, CBL participant, CBL securities settlement system, CBL securities settlement system rule, CR, Credit, credit risk, Currencies, default management procedure, due diligence, finality rule, Global, ISCR, letter of credit, liquidity provider, Operational risk, risk management, risk management function, Securities, securities settlement system rule

Content in this bundle

• Country Report
  • Country Report (Markdown version)
  • Country Report (PDF)