German paper explores risks of sub-custodian chains
Structures to safeguard financial assets are opaque and possibly risky
Risks may arise when the safekeeping of foreign securities is delegated from one custodian bank to another, with those risks increasing as these chains extend in length and across borders, according to a discussion paper published this month by the Deutsche Bundesbank.
In Out of sight, out of mind? On the risk of sub-custodian structures, Thomas Droll, Natalia Podlich and Michael Wedow present what they call the first empirically-based assessment of the sub-custodian structures used to safeguard
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