Collateral Management

Central Clearing Calls for Effective Collateral Management

As Central Clearing is more and more widely adopted around the globe, collateral, especially highly liquid collateral, is in high demand. Capco: Central Clearing Calls for Effective Collateral Management.

Clearstream and Eurex Clearing Enhance Collateral Service Offering

Eurex Clearing now linked to Clearstream's efficient tri-party solution/Link allows automatic management of margin collateral for Eurex Clearing/Important step in integrating Deutsche Börse's services for superior collateral efficiency. Eurex Clearing: Clearstream and Eurex Clearing Enhance Collateral Service Offering.

DTCC Warns Demand for Collateral Set to Overwhelm System Infrastructures

With regulatory changes sparking a surge in demand for collateral, current operational processes and system infrastructures looks set to be overwhelmed, the Depository Trust & Clearing Corporation (DTCC) has warned.

• Finextra: DTCC Warns Demand for Collateral Set to Overwhelm System Infrastructures
• Tabb Forum: Collateral Challenges Demand Collaborative Solutions.

Basel Leverage Ratio May Force CSA Restructuring

Cash collateral can only reduce derivatives exposure if it matches the currency of the underlying swap, threatening existing CSAs and even the new standard CSA.

• Risk: Basel Leverage Ratio May Force CSA Restructuring
• Regulatory Reform: BCBS Finds CSA's Soft Underbelly.

The High Cost of Getting CSA Details Wrong

A recent article in Wall Street & Technology "Focus on Collateral: Optimizing ISDA CSA Document Metadata" by Mahesh Muthu caught our eye. We look at the often daunting task of accurately capturing all the terms in a CSA. Securities Finance Monitor: The High Cost of Getting CSA Details Wrong.

Standard CSA Lives to Die Another Day

Risk Magazine is reporting that ISDA is to embark on a re-write of the Standard Credit Support Annex (SCSA), dubbed “SCSA II”.

• Regulatory Reform: Standard CSA Lives to Die Another Day
• Risk: Isda Forced to Rework Year-Old Standard CSA.

Collateral Management Plans Still Needed

More than 50% of financial institutions have yet to establish a collateral management strategy, according to Clearstream. The Trade News: Collateral Management Plans Still Needed.

AcadiaSoft, Inc. Volumes Sky-Rocket to 60,000 Active Agreements on Its MarginSphere® Service – a 600% Increase Over Past 9 Months

AcadiaSoft, Inc announced today that at the end 2013 the company surpassed 60,000 active agreements on MarginSphere® – representing a 600% increase over the 10,000 live agreements announced in April 2013. Securities Finance Monitor: AcadiaSoft, Inc. Volumes Sky-Rocket to 60,000 Active Agreements on Its MarginSphere® Service – a 600% Increase Over Past 9 Months.

The Collateral Crisis?

In light of new regulation, traders are now finding themselves managing requests for collateral and handling margin calls from central counterparties. Futures and Options World: The Collateral Crisis?

Risk Management

Disconnected About Interconnections: Regulators Still Don't Get the Systemic Risks in Central Clearing

A board member of the ECB, Benoît Coeuré, gave a speech that discussed "the new risks associated with central clearing." It is evident that Cœuré is a proponent of central clearing, though it is annoying to see him identify multilateral netting as the main benefit (<holds head in hands>).  But it is good to see yet again that central bankers are aware that central clearing does create new risks, and that regulators must be proactive in addressing them. Streetwise Professor: Disconnected About Interconnections: Regulators Still Don't Get the Systemic Risks in Central Clearing.

Were the Biggest Banks Playing Brer Rabbit on the Clearing Mandate, and Was Gensler Brer Fox?

One interesting part of the Coeuré speech was his warning that the clearing business was coming to be dominated by a few large banks, that are members of multiple CCPs. Streetwise Professor: Were the Biggest Banks Playing Brer Rabbit on the Clearing Mandate, and Was Gensler Brer Fox?

Enterprise Regulatory Change – Practical Realities (Part III of III)

In the first part of this three part blog, I looked at the concept of 'enterprise regulatory change' and considered whether regulatory change initiatives, at the enterprise level, are even achievable, whilst in the second part, I looked at the implementation models for enterprise regulatory change and what this means at the programme level. In this final part, I want to look at the practical realities of implementing regulatory change and what this might mean to an enterprise-wide initiative. John Philpott: Enterprise Regulatory Change – Practical Realities (Part III of III).

Davis Polk : Analysis of the Revised Basle 3 Leverage Ratio

From DP: The Basel Committee recently finalized its revisions to the Basel III leverage ratio. The OTC Space: Davis Polk : Analysis of the Revised Basle 3 Leverage Ratio.