Contributor: Daniel Parker
This blog post was originally published on TabbFORUM. For many sell-side capital markets participants, collateral management has emerged as the most profound business requirement of 2013. For the buy-side, and depending on the final rules and participants’ functional capabilities, collateral optimization may be one of the most prolific revenue opportunities presented in years.... read more
Contributor: Ted Allen
We all know that the regulatory tsunami of Dodd Frank, EMIR and Basel III is causing a fundamental change in the financial industry and to both buy-side and sell-side business models. With many of these changes coming into effect in 2013, great strain will be put on people, processes and balance sheets. Now is the time for a comprehensive look at how firms are adapting to this new reality and what their main priorities are for driving change and investment.... read more
Contributor: Daniel Parker
This blog post was originally published on TabbFORUM. Collateral as a means of endorsing a promise is as old as human interaction itself. Collateral is even prescribed in the Bible as an ordinary business practice. In fact, a relevant verse of the Book of Exodus reads, “If you take your neighbor's cloak as security for a loan, you must return it before sunset.” Similarly to biblical times, almost all modern pledge practices require some form of collateral to enforce a promise. This blog post was originally published on TabbFORUM. Collateral as a means of endorsing a promise is as old as human interaction itself. Collateral is even prescribed in the Bible as an ordinary business practice. In fact, a relevant verse of the Book of Exodus reads, “If you take your neighbor's cloak as security for a loan, you must return it before sunset.” Similarly to biblical times, almost all modern pledge practices require some form of collateral to enforce a promise. Unlike in biblical times, today collateral can be managed through interconnected repositories and facilitate real-time collateral management across products, counterparties, and regulatory requirements. This process is known as collateral optimization.... read more
Contributor: Daniel Parker
While the $270 billion of annual revenue that over-the-counter (OTC) securities and derivatives dealers collect from trading will likely fall by at least 20 percent once mandatory clearing becomes effective, new revenues driven by collateral optimization services for non-cleared swaps are likely to backfill that lost revenue. Collateral optimization will allow dealers supervised by U.S. banking regulators – which we’ll call “bank dealers” – to operate under specific margin collection rules to collateralize non-cleared swaps, including segregation, calculation, and netting. ... read more
Contributor: Marcus Cree
Last week I participated in a webinar and a Twitterview with DerivSource, covering the changing landscape of risk management in the new OTC derivatives workflow model. It goes without saying that risk is at the center of regulatory reform; the new world of risk management must develop to meet the new requirements and challenges facing the OTC derivatives markets.... read more
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