This week in Post-Trade – 31st May 2017


news
  1. ECB warns of DLT fragmentation risk in clearing and settlementGlobal Custodian, 30th May

 

According to the president of the European Central Bank, Mario Draghi, the application of distributed ledger technology (DLT) could lead to increased market fragmentation across member states. During a speech at the European Parliament in Brussels, he warned of the risks associated with applying the technology to infrastructure, including clearing and settlement.

The topic of blockchain has recently returned to the agenda after a number of new developments, such as a consortium called R3 securing $107 million in fundraising from 40 major institutions. The funding represented the largest blockchain investment to date and included companies such as HSBC, Barclays, BNY Mellon and Citi.

 

  1. Draghi says clearing oversight after Brexit is ‘crucial’ for ECBBloomberg, 29th May

 

In other news, Mario Draghi has also stated that he believes that the European Central Bank needs to continue to oversee clearing in euro-denominated financial instruments after Britain leaves to EU.

Euro-clearing has emerged as a big issue between the UK and the other 27 countries within the EU in the run up to Brexit, with Germany and France – two of the most powerful countries in the bloc – wanting to chip away at London’s dominance in the business.

He maintained that “we need to have proper tools under EU law that we can ensure the stability of the common currency”. He continued by saying that it is crucial that the ECB “can at least preserve the current level of involvement over systemically important euro-denominated clearing activities, regardless of the framework adopted by the EU legislator and of the terms of the future EU-U.K. relation.”

 

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