Unlocking Digital Assets in Securities Finance

Hi, friends. Welcome back to another episode of Peer Connections, the podcast series brought to you by the Global Peer Financing Association, also known as GPFA. These podcasts offer our GPFA members and global beneficial owner friends a forum for information sharing and discussion on topics most important to them. And we hope you, our listeners, appreciate the insights, best practices, and transparency offered from our members and industry friends about securities, finance, or related investment areas. Now let's get into the episode. All right, listeners. Well, it's been a moment since the GPFA Global Peer Financing Association podcast, Peer Connections, has graced your listening channels. But we're back and we're back in a pretty exciting way because we're back in partnership with the team from ISLA, which is the International Securities Lending Association, in advance of their upcoming annual conference in June in Madrid this year. I am one of your hosts today, Brooke Gilman, and I have back with me one of the core GPFA members, Mr. Matt Brunette from Norges Bank. Matt, how are you doing? Good, thank you. Happy to be back. Good. I keep hoping we're going to do more and more of these, hopefully, to pick it up for Peer Connections, Matt. So Matt and I have been trying to lead an effort to both bring greater education to the peer community within GPFA, but in particular, ahead of an upcoming industry conference, which is ISLA's Global Securities, Finance, and Collateral Management Conference in Madrid, Spain, which the dates are June 17th and 19th. So coming up in the days and weeks ahead, we look forward to hopefully seeing as many beneficial owners in attendance there for that conference. And so in advance of that, Matt took a good look at the agenda, both understanding the focus of that conference, but also in your role, Matt, as a board member for ISLA to better understand and think through what topics might be useful to do a bit of a deeper dive or a bit of an intro to ahead of the conference for beneficial owners. And so with that, one of the topics we identified was digital assets. And conveniently, and luckily, ISLA has a lot of expertise in that space. We have an expert today, thankfully, in the digital assets space that sits on the ISLA board. And that's Matthew McDermott from Goldman Sachs. Matthew, how are you doing? I'm doing well, thanks. Thank you for having me. Good, good. And so, Matthew, I think it's very interesting. I know that you have, sounds like a long history in the securities finance space, but with your title being the Global Head of Digital Assets at Goldman Sachs, sitting on the ISLA board, I think it's an interesting area of focus for the association and for securities finance in general. Maybe can you just give me a sense of your background and role at Goldman and your connection back to securities finance and sort of how both maybe you see digital assets strategically within your bank, but also that area of focus for Isla? Yeah, absolutely. So I've been at Goldman a long time, actually. I've been there since like 2005, and I've done a number of different jobs within the organization. But kind of post the financial crisis, I started to kind of lean into teams that were focused on financing both the firms and client assets, which was a broad cross-section of different asset classes. And as things meandered, the latter position I held was running globally a team called Cross Asset Financing. And as is the way at Goldman Sachs, you're always looking to kind of keep yourself at the front of the game. And so in 2017-18, this emergence of blockchain technology came to the fore. And the foundations of which really did lend themselves to really improving the efficiency in and around how we could finance across the market, be that repo, securities, finance, and other means, be that loans. And so I started to take a kind of keen interest in it then. And then towards the end of 2019, I was asked by a number of different people within the organization to take over what was a very fledgling business called Digital Assets. And for me, the real catalyst to join that business or really develop the business was to see how we could transform the financing markets. and so you kind of roll on five years and we're here today and you have a team of about 70 people and we do a whole slew of different things across that business but you know still at the core of that is using the distributed ledger technology to think about how we can more efficiently transact