It is definitely a joint effort, and what I see is not just the commitment of public authorities at the European or national level, but also the commitment of market participants, CSDs and CCPs. I am sure that we all share the same goal, namely making Europe stronger and more attractive for both domestic and foreign investment, thus stimulating and sustaining growth.
Through the coordinated action of so many stakeholders, financial markets will become safer, more transparent and, therefore, more efficient and integrated. Dismantling legal and operational barriers, which is the aim of current EU legislative proposals and new infrastructure such as T2S, will benefit those who adapt their business models to a more competitive landscape. It is important to highlight that the benefits of T2S will be fully achieved if the current harmonisation efforts are successfully implemented at the European level and especially at the national level.
In terms of infrastructure, T2S is the necessary platform for setting up a single European market for securities services. In terms of benefits for Europe, T2S will make the post-trade environment safer and more efficient. It will reduce the cost of settling securities transactions and bring about significant collateral savings for market participants. These collateral savings are particularly valuable at a time when demand for high-quality collateral continues to increase, as a result of both the crisis and new regulatory developments.
But reaping the full benefits from the launch of T2S requires that it is complemented by the provisions laid out in the CSD regulation proposed by the Commission. Both initiatives are supported by the harmonisation agenda which has been advanced by the Eurosystem and other European fora.
The CSD regulation is critical to post-trade harmonisation efforts in Europe. The ECB’s Governing Council has stated its strong support for the proposed regulation, which will enhance the legal and operational conditions for cross-border settlement in the EU in general and in T2S in particular. In this respect, the ECB has recommended that the proposed regulation and the corresponding implementing acts are adopted prior to the launch of T2S.
Work is also in progress at the Eurosystem level to improve the possibilities for the cross-border use of collateral for Eurosystem credit operations, which will increase efficiency. Further benefits are expected from market-led initiatives to enhance the interoperability of triparty services in Europe.
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