Technology services: Vermeg

Before the Eurosystem Collateral Management System (ECMS) – powered by Vermeg’s Megara platform – went live on June 16, 2025, the eurozone’s collateral operations were fragmented across more than 20 national systems, each with its own procedures and interfaces. 

This fragmentation created inefficiencies, limited transparency and heightened operational risk. The Eurosystem’s goal was to deliver a single, harmonised, real-time infrastructure capable of supporting monetary policy operations and secure market activity across all participating countries. 

The ECMS system now effectively runs the collateral management operations for all eurozone central banks, connecting more than 2,500 financial institutions and managing a nominal amount of approximately €20 trillion ($23.7 trillion) in eligible marketable assets across the Eurosystem. 

The launch of the ECMS marked a transformation in European market infrastructure. “I think it is a cornerstone of European integration and standardisation,” Carlos Conesa, associate director general for operations, markets and payment systems at the Bank of Spain, tells Central Banking. 

Each national central bank now maintains a collateral pool for monetary policy counterparties in the ECMS. The system combines data from central securities depositories (CSDs), tri-party agents and Eurosystem databases to assess counterparties’ credit positions and how much they can draw on from a credit line for intraday liquidity management. 

The architecture delivers centralised eligibility and risk-control mechanisms; automated valuation, exposure and collateral monitoring; advanced processing automation ensuring high efficiency and data integrity; and full business continuity, including a dual-site disaster-recovery readiness operated by the Eurosystem.

The ambitious ECMS project began with a request-for-information phase in 2017 and culminated in go-live in 2025, says Khaled Ben Abdeljelil, executive director at Vermeg.

Since its approval in December 2017, the project moved into the realisation phase, covering the definition of system specifications, technical implementation and user validation. The Bank of Spain and Banque de France led the project on behalf of the 4CB governance group – which also includes the Deutsche Bundesbank and the Bank of Italy – to deliver the service to the Eurosystem. Just two central banks – Banque de France and the Central Bank of Ireland – were already running older and different versions of the Megara solution. 

At the start of the initiative, the Banque de France and the Bank of Spain had to deal with “completely different systems, different technologies, different processes” — a true “mosaic” of legacy technology stacks across national central banks. Vermeg’s role was to deliver the new solution that would replace those heterogeneous systems and enable a harmonised approach under ECMS. Many of these systems were built internally. This meant implementing new configurations and customisations into Megara and standardising this across more than 20 central banks, some of which wanted their own way of doing things to prevail. 

“We realised along the project how complex the ECMS is,” Conesa says. The system also needed to connect to T2 (the Eurosystem’s RTGS system) to manage credit lines, and T2s (which provides cross-border securities settlement) for mobilising and demobilising collateral, as well as connecting to pricing platforms. Further, because there were no ISO 20022 standards for certain market segments, such as tri-party operations, the ECMS had to set them. 

The Banque de France and the Bank of Spain conducted internal testing between 2020–22 before national central banks conducted the acceptance testing phase from 2022–23.  This process was also staggered, with a selection of central banks in the Eurosystem invited to test the technology first, before widening the circle to all central banks. 

Ben Abdeljelil says Vermeg ensured that the Banque de France and Bank of Spain teams received adequate training, enabling them to achieve self-sufficiency and autonomy in mastering the system, and to subsequently support and train other users.  However, “significant testing” of the ECMS was “very difficult”, Conesa says, given that the new platform  had to interact with the testing and training environments of different systems. “Allowing counterparties and central banks to test in a meaningful way was really, really challenging.”

Alexandre Gautier, deputy director-general for financial stability and operations at the Banque de France, spearheaded the project with Conesa at the Bank of Spain, tells Central Banking the project was postponed twice, predominantly due to difficulties around harmonisation and testing. 

However, Vermeg dedicated more resources, such as setting up a taskforce to solve harmonisation issues. Vermeg also showed flexibility related to evolving user requirements, which were tricky to outline completely at the beginning, given lessons from developments and testing were still to come. As a result, in the months leading up to the go-live date, national systems had already enabled the mobilisation of more than €1.5 trillion in collateral per month. 

Ben Abdeljelil says working with central banks pushes Vermeg toward excellence. “People sometimes see central banks as ‘dinosaurs’ that move very slowly and are not early adopters of technologies, but that cannot be further from the truth,” he says. “Working with central banks obliges us to remain aligned with the latest technologies, market trends and regulatory requirements.”

After the community testing phase from 2023–24 that brought in CSDs, tri-party agents and participant banks, the migration lasted from 2024 until the go-live last year. Since then, the ECMS has been running very smoothly, “as we say in French, like a Swiss clock”, says Gautier – even generating praise from the Eurosystem community and from users. 

The ECMS had another release at the end of November 2025 and a final one scheduled in June 2026. Meanwhile, the system is continuously tested for vulnerabilities and penetration testing once a year by an external company certified by central banks.

Security, resilience and operational robustness are paramount in projects of this nature. Ben Abdeljelil notes that ECMS benefits from a dual-site architecture in Madrid and Paris, with each location serving as disaster recovery for the other. Every six months, the primary data centre switches from Spain to France and then back again. Beyond this setup, comprehensive measures were implemented to ensure the solution is fault-proof in terms of architecture, resilience, cybersecurity, intrusion prevention and operational continuity.

Currently, ECMS is the platform for pledging collateral and for obtaining credit in monetary policy operations for all counterparties across the Eurosystem. Vermeg’s solution plays a critical role in enabling liquidity provision by managing the collateral pledged by participants to obtain central bank liquidity. It also supports rapid mobilisation and transfer of central bank money in times of stress

Megara can also be tailored to cover digital assets, although this is not a current feature of the ECMS. Ben Abdeljelil says Vermeg is seeing growing demand from central banks for real-time processing capabilities, as time-to-market is “extremely important” for overall financial stability, especially during market stress conditions. He anticipates further expansion in digitisation, digital assets and artificial intelligence. Meanwhile, the ECB announced on January 27 that it is working towards accepting digital assets compliant with Europe’s Markets in Crypto-Assets Regulation as collateral by March 30. 

Megara has evolved into a sovereign-grade platform designed to support mission-critical operations within the most demanding financial ecosystems. With the Bank of England, Bank of Canada and Norges Bank as clients, Vermeg’s Megara enhances monetary policy implementation, accelerates collateral mobilisation and provides a strong foundation for future digital and tokenised collateral frameworks.  

The Central Banking Awards 2026 were written by Christopher Jeffery, Daniel Hinge, Daniel Blackburn, Joasia Popowicz, Levente Koroes, Thomas Chow, Jono Thomson, Riley Steward and Blake Evans-Pritchard.