New electronic settlement system for Greek Government Securities at the Bank of Greece
04/07/2005 - Press Releases
On Monday, June 27, 2005, the Bank of Greece fully activated
the new platform of the Securities Settlement System for Greek government
securities (System for monitoring transactions in book-entry securities,
The new platform fully serves the requirements of the most
developed clearing and settlement systems worldwide. It allows real-time final
settlement (Real Time Gross Settlement (RTGS), Delivery versus Payment (DvP)
Model 1, according to BIS regulations) as well as participants' real-time direct
access to information regarding their transactions. In addition, it increases
the potential for managing a higher volume of transactions and their related
functional risk regardless of market conditions.
The new system operates within the same framework of the
Electronic Secondary Securities Market (HDAT). In this way, real-time
communication of the two systems is achieved that allows a more effective
updating of the members' trading activity.
The establishment and functioning of the new system is
considered as fully successful. During the first five days of functioning of the
system (June 27- July 1, 2005) more than 85% of all DvP transactions settled
occurred in real time (RTGS - DvP Model 1) whereas less than 15% occurred via
multilateral netting cycles.
From the above data we can conclude the following:
· The management of the settlement risk via the introduction
of the settlement model "one-by-one" (gross settlement) was fully
successful and effective since the first day of operation of the system.
· The introduction of the new settlement platform, targeting
the minimisation of settlement risk, did not create any liquidity constraint to
the system participants, in other words there was not any increase in the system
· The RTGS settlement percentages are very high compared to
the respective percentages in most of the other European countries.
All this shows the excellent organisation and co-operation
between the Bank of Greece and the domestic and foreign credit institutions
participating in the system; the efficient management of liquidity of the Greek
credit institutions, acting either for their own account or as custodians of
foreign financial institutions and the full development of the Greek money and
securities markets. Finally, the successful functioning of the electronic
trading (HDAT) and settlement (BOGS, with a daily average volume of settled
transactions of EUR 27.08 billion during the period January- May 2005) systems,
contributed to the increased liquidity of the Greek fixed-income market and to
the very narrow yield spreads between the Greek and the German bonds.