European Settlement: Dinne Looks Back and Forward
April 16, 2007
As an operations
executive in what was then the Euroclear division of Morgan
Guaranty Trust Co. of New York--now part of JP Morgan Chase &
Co.--in 1969, Dinne processed settlement instructions for hundreds
of Eurobond transactions in certificated form. Euroclear spun off
from JP Morgan in 1972 (JP Morgan continued as the depository's
operator and banker until 2001), and Eurobonds have since been
immobilized. Euroclear Bank now settles more than EUR200 trillion
($267 trillion) worth of deals in not only Eurobonds, but an array
of European fixed-income, equity and investment-fund
transactions.
Euroclear has attempted, through a series of acquisitions, to become a one-stop shop for processing cross-border transactions in Europe. It bought the French domestic depository in 2001, followed by those of the Netherlands, U.K. and Ireland in 2002, leading some local European agent banks to complain that Euroclear Bank had an unfair advantage in cross-border equities. Euroclear countered in 2005 by creating a parent firm, Euroclear SA, as an umbrella organization for Euroclear Bank and its sister depositories (a number that has grown to five with the addition last year of Belgium's CIK).
Euroclear plans to move all its operating platforms onto a single system by 2010, while harmonizing market rules and practices in the five countries for which it serves as the central depository. Such efforts coincide with the European Commission's goal of creating a single European market through a combination of private and public initiatives.
Over the years, Dinne has held numerous roles in Euroclear's commercial, corporate strategy and product development departments. She will be succeeded as CEO by Yves Poullet, chief operating officer of Euroclear Bank and former deputy general manager of Euroclear France. In a recent interview with Securities Industry News senior international editor Chris Kentouris, Dinne spoke about her part in Euroclear's growth and her outlook on the future of European clearing and settlement.
What are you most proud of having accomplished at Euroclear? Growing and strengthening our relationships with clients and expanding Euroclear's product range from Eurobonds to other fixed-income instruments, equities and investment funds. The two achievements are in fact highly complementary in that Euroclear was able to develop new services that clients wanted. The only way to truly deliver services that meet client demand--then and today--is to work very closely with clients and listen to them. I have enjoyed the interaction I have had with our clients, from back-office staff when I started at Euroclear, to board members from client organizations today. Another market achievement with which I was involved was the creation of the electronic bridge between Euroclear and Clearstream for the efficient settlement of transactions between members of each depository.
What was your biggest challenge? Arriving at a mutually agreeable arrangement with Clearstream, then known as Cedel Bank, to form the first electronic bridge in 1992. While both organizations appreciated the benefits the bridge would deliver to the market by making settlement between the two ICSDs seamless, we were--and are--still competitors. We had to work on development plans together and finally agree on how to implement the exchange of information between our two systems for the good of the market. The discussions were difficult, but in the end both organizations agreed on a plan and made the commitment to deliver what is today Europe's best example of CSD interoperability. Naturally, we have worked together to enhance the bridge as the market's needs changed and as technology evolved.
