By Gordon Platt
Safeguarding client assets has never been more important in this era of global economic uncertainty —and even subcustodians are finding themselves increasingly in the spotlight as a result of sovereign and commercial pressures.
With the eurozone crisis still percolating and the global economic outlook uncertain, subcustodians have come under intense scrutiny once again. To be successful, they need the technology, expertise and best-in-class capabilities to provide safe and efficient services and to respond quickly and effectively to any type of market disruption.
Subcustodians are the behind-the-scenes securities experts who safeguard client assets and manage risks in local markets around the world on behalf of global custodians. They provide a wide range of securities services, as well as alerts and insights into developments in markets where they are located.
In our 11th annual survey of the World’s Best Subcustodians, Global Finance selected the institutions that reliably provide the best custody services in 69 countries and nine regions of the world. Our editors and reporters, with input from expert sources, selected the winners based on a series of objective and subjective criteria that include customer relations, quality of service, competitive pricing, smooth handling of exceptions, technology platforms, post-settlement operations, backup systems and knowledge of local regulations and practices.
In selecting the winners, we also considered market share, commitment to the business, experience and number of staff, innovation, direct links to depositories, financial soundness and safety, and range of assets serviced. We also took into account special situations such as sovereign debt crises.
For example, recently the Hellenic Financial Stability Fund recapitalized Eurobank, which won the Best Subcustodian award for Greece. The fund is responsible for the stability of the Greek banking sector and injected capital into Greece’s major commercial banks, using some of the bailout funds received from the International Monetary Fund, the European Central Bank and the European Union. It received these monies as part of the European Financial Stability Facility’s tranche of funding for Greece.
In April, on the other hand, the Greek government suspended, for the time being, Eurobank’s proposed merger with the National Bank of Greece. Nonetheless, Eurobank has a leading market share in Greece in securities services, custody, derivatives trading and clearing.