More banks are developing collateral management solutions to comply with the new regulations and to encourage their corporate clients to consolidate their collateral in their bank.

Clearstream and Standard Chartered Bank are developing a customized collateral management solution for their mutual clients following the signing of a letter of intent that signals the start of their development collaboration to enable their customers to benefit from the Liquidity Hub Connect collateral management service.

This will allow Standard Chartered customers to be able to consolidate their collateral holdings through Clearstream's Global Liquidity Hub and cover their global exposures from a single collateral pool. The customers will then be able to leave their assets in custody at Standard Chartered while avoiding any inefficient collateral fragmentation.

George Nast, global product head, transaction banking at Standard Chartered Bank, said: "Not only will clients across our footprint markets of Asia, Africa and the Middle East be able to effectively collateralize obligations on a real-time basis, they can overcome an industry challenge of collateral fragmentation as well."