Targets
Optimize collateral management
- Reduce risk by systematic collateralisation of any exposure.
- Optimize the allocation of collateral and reduce financing costs.
- Collateral management to become a profit center rather than a risk mitigator.
Evolution
Collateral management is becoming a transversal function supporting all capital markets transactions.
- Traditionally, collateral management was supporting repos and stock loans.
- Collateral management now extends to all banking operations including transactions traded exchanges and OTC (derivatives ... ).
Challenges
Collateral management becomes complex and must be (re) organized.
- Assess exposures on any outstanding position, manage disputes and source right collateral.
- Optimize the choice of collateral to satisfy counterparties, financing costs (cheapest collateral to deliver ... ) and liquidity.
- Define optimal management of collateral in the organization (internal management vs. outsourcing).
- Selection of dedicated collateral softwares and / or external service providers (Custodians or triparty agents).
