Why has collateral optimisation become a strategic priority for firms?
In an environment of higher funding costs, increasing regulatory demands, and ongoing pressure on balance sheets, firms are looking to maximise the value of every asset they hold. The challenge today is not simply whether collateral is eligible, but whether it is in the right place, at the right time, supporting the right activity.
This is why optimisation has become such a strategic priority. We are seeing strong demand for solutions such as ECOS — our collateral optimisation service developed with Transcend, which helps clients optimise collateral allocation across multiple obligations. We are also seeing growing adoption of SelfSelect, which allows clients to allocate assets to the Collateral Highway based on the outputs of their own optimisation engines.
Combined with new capabilities that enable clients to direct specific assets to counterparties and transactions intraday, the focus has shifted from collateral inventory management to collateral optimisation as a source of liquidity, funding, and balance sheet efficiency.
What impact will T+1 have on collateral mobility and liquidity management?
T+1 is often described as a change to settlement, but its implications extend far beyond that.
By compressing the post-trade cycle, T+1 makes liquidity management, collateral mobilisation, and operational efficiency even more critical. Firms will have less time to source funding, move assets, and resolve exceptions, increasing the need for automation and real-time decision-making.
Euroclear’s response is an integrated proposition designed to help clients settle earlier, resolve faster, and fund smarter.
A new operational day, starting two hours earlier at 23:00 CET rather than the current 01:00 CET, will enable Asia Pacific settlement and financing to begin earlier. This will reduce competition for credit and operational resources and help APAC activity conclude sooner.
EasyFocus+ helps clients predict, prioritise, and resolve exceptions, using post-event analysis to help prevent settlement fails. It will enable clients to focus on high-risk transactions earlier in the day and should ultimately help substantially reduce central securities depository (CSD) penalty costs and operational staffing requirements.
Solutions such as NetSettle — which enables settlement netting across buy-sell chains — a new gating event for securities financing transactions, and shaping capabilities within triparty services are designed to help clients manage liquidity more efficiently within a shorter settlement cycle. Ultimately, success in a T+1 environment will depend on how effectively firms can move liquidity and collateral to where they are needed, when they are needed.
Are digital collateral and tokenisation finally moving from concept to reality?
The discussion has clearly shifted from theory to execution. The industry is increasingly focused on practical use cases where digital collateral can solve real challenges around operating hours, liquidity management, and the movement of assets across markets.
Digital technologies have the potential to transform how repo, securities lending, and over-the-counter (OTC) derivatives markets operate, particularly through faster collateral mobility, eligibility automation, instant substitution, and improved interoperability across venues. What matters, however, is whether it delivers tangible improvements in efficiency and market functioning.
We see particular potential in areas such as intraday repo, collateral exchanges, and margin management, where digital technologies can help remove friction and accelerate the transfer of collateral. The industry is also placing greater emphasis on interoperability between traditional and digital infrastructures. The next phase is proving these solutions at scale within robust legal, operational, and regulatory frameworks, and we are now seeing meaningful progress towards that goal.
How important is it to have a unified collateral ecosystem, connecting domestic assets with global liquidity pools and connecting cross-asset collateral?
One of the biggest challenges facing market participants today is fragmentation. Significant pools of high-quality collateral exist around the world, yet they are often constrained by market structures, jurisdictional boundaries or operational barriers. Increasingly, the industry does not have a collateral shortage problem; it has a collateral mobility problem.
At the same time, firms are seeking greater flexibility to use a broader range of assets, including equities and ETFs alongside fixed income securities, within a single collateral framework. A connected ecosystem helps unlock value from assets that are already available by linking domestic markets with global liquidity pools and enabling the seamless use of collateral across asset classes.
We see this in the growing demand to mobilise assets such as Korean government bonds, offshore Chinese government bonds, and other regional asset pools into international collateral networks. As markets become more interconnected and collateral requirements continue to grow, the ability to connect settlement, financing, liquidity, and collateral services within a single ecosystem becomes increasingly valuable.
You are approaching your 25th Collateral Conference. Quite an achievement. How much have clients' needs changed over that time?
The fundamental objective has remained remarkably consistent: clients want to access liquidity efficiently and make the best use of their assets. What has changed is the complexity of the environment in which they operate. Twenty-five years ago, discussions were largely focused on operational efficiency and market access. Today, clients are navigating regulatory reform, balance sheet optimisation, growing collateral demands, shorter settlement cycles, and digital transformation simultaneously.
As a result, expectations of market infrastructure providers have evolved significantly. Clients increasingly look for integrated solutions that bring together settlement, financing, liquidity, and collateral management, while helping them maximise the value of assets across markets and jurisdictions. The strategic importance of collateral has never been greater, and neither has the need for connectivity, interoperability, and efficient asset mobilisation.
← Previous interview
Canton Foundation
The tokenisation transition
Image: Verhelst 
