Bank of England to launch post trade task force
09 June 2020 London
Image: MichalBednarek/Shutterstock.com
The Bank of England (BoE) is set to launch a task force to harness new technologies to improve the resilience and efficiency of post trade systems.
The task force will be led by the post trade technology market practitioner panel, which is chaired by BoE executive director for Markets, Andrew Hauser, and brings together a group of 15 experienced, senior decision-makers.
The panel met three times in Q2 2019 and built a common understanding of some of the key issues in post trade today.
These issues include the fact that post trade activities, such as accurate reporting and collateral management, still too often rely on a patchwork of manual or outdated technological processes, using systems and data definitions that can vary widely between and often even within firms.
It was noted that the complexity in post trade matters raises the cost of financial services that are used, sometimes materially so.
Uncessasary complexity also holds back innovation because post trade services provide the bedrock and data on which ‘front end’ services are built, the panel notes.
Additionally, aged, slow or incompatible systems can pose real risks to operational resilience, which the panel said is an issue of great importance to firms and regulators.
According to the panel, enacting meaningful change to address these issues will take a sustained and coordinated effort. As such, the post trade task force will explore the scope for moving from discussion to action, including a review of the coordination mechanisms available to implement the next steps for the industry.
The panel has also set out a report
to propel a "powerful market response" that will be the starting point for substantive improvements in the post trade ecosystem.
Dave Ramsden, deputy governor for markets and banking at the BoE, comments: “The pressure of technological change is pertinent to the post trade system where industry-wide our capabilities are likely lagging our potential.
“There are obvious cost benefits in simplifying. But if you look at the kinds of innovation the sector has seen since it built the systems on which it runs, it is clear that there are also opportunities to take advantage of the benefits of new technologies and functions."
Othe members of the post trade technology market practitioner panel include Nike Trost of the Financial Conduct Authority; Andrew Kellner of Barclays; Robert Lamb of BlackRock; and Jeremy Lewis of Credit Suisse.
They are joined by John Hagon of CLS; Gareth Jones of Euroclear GlobalCollatera; Alex Powell of Euroclear UK & Ireland; Joanne Hannaford of Goldman Sachs; David Hudson of J.P. Morgan; Daniel Maguire of LCH; Siobhan Clarke of M&G Investments; Katherine Wetmur of Morgan Stanley; Akbar Sheriff of State Street; and Mike Irwin of XTX Markets.
The task force will be led by the post trade technology market practitioner panel, which is chaired by BoE executive director for Markets, Andrew Hauser, and brings together a group of 15 experienced, senior decision-makers.
The panel met three times in Q2 2019 and built a common understanding of some of the key issues in post trade today.
These issues include the fact that post trade activities, such as accurate reporting and collateral management, still too often rely on a patchwork of manual or outdated technological processes, using systems and data definitions that can vary widely between and often even within firms.
It was noted that the complexity in post trade matters raises the cost of financial services that are used, sometimes materially so.
Uncessasary complexity also holds back innovation because post trade services provide the bedrock and data on which ‘front end’ services are built, the panel notes.
Additionally, aged, slow or incompatible systems can pose real risks to operational resilience, which the panel said is an issue of great importance to firms and regulators.
According to the panel, enacting meaningful change to address these issues will take a sustained and coordinated effort. As such, the post trade task force will explore the scope for moving from discussion to action, including a review of the coordination mechanisms available to implement the next steps for the industry.
The panel has also set out a report
to propel a "powerful market response" that will be the starting point for substantive improvements in the post trade ecosystem.
Dave Ramsden, deputy governor for markets and banking at the BoE, comments: “The pressure of technological change is pertinent to the post trade system where industry-wide our capabilities are likely lagging our potential.
“There are obvious cost benefits in simplifying. But if you look at the kinds of innovation the sector has seen since it built the systems on which it runs, it is clear that there are also opportunities to take advantage of the benefits of new technologies and functions."
Othe members of the post trade technology market practitioner panel include Nike Trost of the Financial Conduct Authority; Andrew Kellner of Barclays; Robert Lamb of BlackRock; and Jeremy Lewis of Credit Suisse.
They are joined by John Hagon of CLS; Gareth Jones of Euroclear GlobalCollatera; Alex Powell of Euroclear UK & Ireland; Joanne Hannaford of Goldman Sachs; David Hudson of J.P. Morgan; Daniel Maguire of LCH; Siobhan Clarke of M&G Investments; Katherine Wetmur of Morgan Stanley; Akbar Sheriff of State Street; and Mike Irwin of XTX Markets.
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