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Regulations such as the Basel III accords, the Dodd-Frank Act and EMIR significantly impact demand for quality collateral, which is expected to increase year-on-year as more market participants enter the cleared markets. This report examines the effect of global regulations on collateral supply and demand and the current issues faced by operational teams in daily collateral management. The report also details the key considerations for a sound collateral optimisation solution. For more information, please visit: research.greyspark.com
capital markets intelligence
Lack of global collateral inventory
Regulations increasing global
demand for collateral
Fragmented technology
infrastructure
Siloed operational structure
Reliance on manual processes
Lack of an audit trailS
election of op
timal
nettin
g strateg
y
Sele
ction o
f optim
al a
ccount
seg
regatio
n o
ptio
ns
Lack
of
auto
mate
d r
eport
ing
Sta
le m
arke
t dat
aLe
gal a
gree
men
ts n
ot fed
into
T&
O s
yste
ms
Lack
of k
now
ledg
eabl
e pe
rson
nel
Centra
l cou
nterp
arty
risk
Lack of strategic dire
ction
Geographical segregation
of operational tasks
Lack of automated portfolio
simulation tools
COLLATERAL OPTIMISATION:
CHALLENGES AND OPPORTUNITIES 2015
COLLATERAL OPTIMISATION:
CHALLENGES AND OPPORTUNITIES 2015
ISSUES AFFECTING COLLATERAL MANAGEMENT
COLLATERALOPTIMISATION
BREAK GLASS HERE
OUTSOURCING VS. INSOURCING
BUYING VS. BUILDING
Outsourcing is expensive and requires trust in a third-party. Insourcing can mean greater operational control. However, insourcing does not automatically equal elimination of operational risk.
ENTERPRISE-LEVEL CHANGEVS. SILOED SOLUTIONSEnterprise-level change is expensive for large firms that want to take a more siloed and staggered approach. This carries the risk that the siloed implementations may not be consistent, leading to fractured enterprise change.
TACTICAL VS. STRATEGIC SOLUTIONSAlthough strategic change is the ideal solution for all organisations, quick and cheap Agile developments present a way to achieve change effectively without breaking the bank.
Buying a collateral management solution is easy with many vendor solutions on offer, but building is the only way to get a custom-ised, cutting-edge solution. Building requires a large budget and may not appeal to small firms looking for a quick solution.