Collateral Management

The EU Systemic Risk Board has published a paper, “Collateral scarcity premia in euro area repo markets” (October 26, 2017) that bears some examination. At the close of 2016, the…

Finadium: The Global Tri-party Services Market in 2017: A Finadium Survey

October 30, 2017

Collateral Management, Derivatives, Operations, Repo, Securities Lending

collateral management, Finadium, Repo, Securities Lending, topstory, tri-party

The global tri-party market size is US$4.65 trillion, up from US$4.3 trillion in 2014, according to a new survey from Finadium. Tri-party services continue to evolve by product and region,…

What we heard and said at the first Asian Prime Collateral Forum

October 30, 2017

Asia, China, Collateral Management, Fixed Income, Market infrastructure, Prime Brokerage, Repo

ASEAN, Asian Prime Collateral Forum, Data repositories, Prime Brokerage, Repo, topstory

Finadium was invited to present last week at the first ever Asian Prime Collateral Forum, hosted by the Korean Institute of Finance. The Prime Collateral Forum brought together more than…

What’s better, legacy or enterprise technology in securities finance and collateral management?

October 26, 2017

Collateral Management, Repo, Securities Lending, Technology

collateral management, enterprise, legacy, securities finance, topstory

Following the publication of a report in our technology practice, “Legacy Architecture in Capital Markets: Enhance, Augment or Replace” we got to thinking more about the application of these ideas…

Towards a central collateral utility: the value proposition of CSDs in collateral services

October 12, 2017

Collateral Management, Market infrastructure

Central Securities Depositories, collateral management, CSDs, DTCC, DTCC-Euroclear Global Collateral Ltd, Euroclear, topstory

Central Securities Depositories (CSDs) have emerged as leading providers of tools and services for collateral management, building on their own longstanding roles in market infrastructure. This article examines the role…

Highlights from ISDA’s 2017 margin survey

October 4, 2017

CCP, Cleared Interest Rate Swaps, Collateral Management, Derivatives, OTC Derivatives Clearing, Regulatory, Systemic Risk

Cleared Derivatives, Initial Margin, ISDA, ISDA Margin Survey, Non-Cleared OTC Derivatives, topstory, Variation Margin

The International Swaps and Derivatives Association (ISDA) has resumed its annual survey on margin. Initial Margin (IM) and Variation Margin (VM) requirements on certain types of derivatives contracts are now…

Credit Suisse’s Zoltan Pozsar on sterilization, repo and FX Swaps (Premium)

September 25, 2017

Cash management, Collateral Management, Federal Reserve, FX, Liquidity Management, Repo

Credit Suisse, FX Swaps, Liquidity, Repo, sterilization, topstory, Zoltan Pozsar

Credit Suisse’s Zoltan Pozsar has written a master class on how money flows in today’s financial markets. It’s on the complicated side and you might need to read this article…

The layering of regulatory cost on Securities Financial Transactions

September 19, 2017

Michael Cyrus

Basel III, Collateral Management, Europe, Repo, Securities Lending

DekaBank, Europe, Leverage Ratio, Michael Cyrus, NSFR, regulatory cost, securities finance, SFTs, topstory

It is now part of financial textbook wisdom that collateralization is a favored tool to reduce unsecured exposures in financial systems and thereby promote systemic stability. However, in stark contrast,…

A framework for build, buy or network in a changing market environment

September 14, 2017

Bimal Kadikar

Collateral Management, Operations, Repo, Securities Lending, Technology

Bimal Kadikar, outsourcing, technology, topstory, Transcend, utilities

Capital markets firms are faced with tough choices in their vendor and utility selection. But when should firms choose to partner with vendors, participate in industry utilities or insource development…

SFM Magazine, Fall 2017, is now online

September 13, 2017

Collateral Management, Repo, Securities Lending

artificial intelligence, blockchain, cost optimization, outsourcing, Quantitative Easing, securities finance, topstory

Securities Finance Monitor Magazine, Fall 2017, is now online. This edition features articles on the end of Quantitive Easing, roles for vendors in securities finance, and what clients get out…

Finadium: Central Bank Tapering: Impacts for Liquidity and Collateral Markets

September 12, 2017

Bank of England, Bank of Japan, Collateral Management, ECB, Federal Reserve, Investments, Liquidity Management

Bank of England, Bank of Japan, Central Banks, European Central Bank, Federal Reserve, Finadium, tapering, topstory

Central bank tapering season is on the horizon: this means opportunities for price volatility, spread movements between products, and exchange rate fluctuations. It also means a potentially new set of…

Applications for artificial intelligence in securities finance and collateral management

September 7, 2017

Martin Seagroatt

Artificial Intelligence, Collateral Management, Repo, Securities Lending, Technology

artificial intelligence, Broadridge, collateral management, securities finance, technology, topstory

Following numerous hype cycles, artificial intelligence (AI) is now gaining widespread adoption, with the potential to radically transform many areas of the financial services industry. Continue reading

LCH’s CollateralSeg should reduce gray areas of collateral ownership

LCH announced on August 10th that it will support a new account type representing pledged collateral for it’s SwapClear service. This should help reduce the risk that ownership rights can become…

Finadium Big Ideas Quarterly Q3 2017 now online

August 1, 2017

Collateral Management, Derivatives, Repo, Securities Lending

collateral, derivatives, Finadium, Repo, Securities Lending, technology, topstory

Our quarterly presentation on research, news and events. Finadium research clients can log in and download the presentation here

Get ahead on key issues with Finadium research: an example from the BIS Annual Report

July 12, 2017

Bank for International Settlements, Funding/Liquidity, systemic risk, topstory

Cash management, Collateral Management, ECB, Europe, Liquidity Management, Market infrastructure, Money Market Funds, Pro-cyclicality, Regulatory, Repo, Risk Management, Systemic Risk

The Bank for International Settlements (BIS) released their 87th annual report on June 25th including an important section on risks in the US dollar funding market. The section outlines concerns…

Finadium: Survey of Leading Asset Managers on Securities Lending

July 12, 2017

Collateral Management, Investments, Securities Lending

asset managers, collateral, Finadium, Securities Lending, Survey, topstory

This report presents the results of Finadium’s tenth annual survey of asset managers in securities lending. The report is a guide to best practices, a peer review and a forward-looking…

Title Transfer Collateral Arrangements – European and US rules

June 19, 2017

Basel III, Collateral Management, Derivatives, Europe, Re-Hypothecation, Regulatory, Repo, Securities Lending

Basel capital rules, MiFID II, Regulatory, title transfer collateral arrangement, topstory, TTCA

Title Transfer Collateral Arrangements (TTCA) are executed between parties engaged in bilateral securities lending, bilateral repo or bilateral derivatives. While these arrangements are not new, having been enshrined in regulation…

The Five Cs of Bank and Client Success in Securities Finance

June 15, 2017

Anand Krishnan

Basel III, Cash management, Central Counterparties, Collateral Management, Derivatives, Hedge Funds, Investments, Repo

ALM, CCPs, collateral, Natixis, Repo, topstory

Today’s global investment banking market continues to be shaped by the need for innovation and synergies driven by an evolving regulatory landscape. We have identified the Five Cs for success…

Slides from our webinar on Securities Finance Market Structure (Premium)

June 13, 2017

Basel III, Collateral Management, Hedge Funds, Investments, Pension Management, Prime Brokerage, Repo, Securities Lending, Technology

Finadium, Regulation, Repo, securities finance, Securities Lending, technology, topstory

We delivered a webinar, Securities Finance Market Structure Trends, on June 13, 2017. Finadium clients can download the presentation below. Continue reading

SFM Magazine, Summer 2017, is now online

Securities Finance Monitor Magazine, Summer 2017, is now online. This edition features articles on disruptive fintech, industry collaboration and building a holistic collateral infrastructure. Hard copies will be distributed at…

Finadium: Investor Questions in Securities Finance: Analysis from the FISL Conferences

June 7, 2017

Collateral Management, Investments, Securities Lending

collateral management, Finadium, FISL, investors, Securities Lending, topstory

In this report, we analyze 176 attendee questions and data from our Investors in Securities Lending events in April 2017 along with commentary from 40 investors who completed our feedback…

Are hedge funds really that risky as counterparties in collateralized trading?

June 1, 2017

Collateral Management, Custodians, Hedge Funds, Prime Brokerage, Repo, Securities Lending, Technology

brokers, buy-side, collateral management, credit risk, Custodians, hedge funds, P2P, peer to peer, topstory

As Peer to Peer markets make their play, credit departments at buy-side firms around the world are looking askance at the very idea of a collateralized trade directly with a…

Collateral Opportunities for Investors

May 30, 2017

Collateral Management, Investments, Repo, Securities Lending, Uncategorized

Beneficial Owners, BNPP, collateral, Repo, Securities Lending, topstory

A combination of legislative reform, geopolitical events and uncertainty as to the pace of US monetary policy tightening has created a disconnect in the financial markets, creating substantial opportunities for…

Building a Holistic Collateral Infrastructure

May 24, 2017

Bimal Kadikar

Collateral Management, Regulatory, Technology

collateral management, cost allocations, Kadikar, silos, topstory, transcend street solutions

Following the financial crisis, regulations and their associated reporting have created an opportunity for banks and investment firms to create a single, unified collateral infrastructure across all product siloes. This…

Finadium report: The Challenge of Standardizing Collateral Schedules in OTC Derivatives

May 23, 2017

Central Counterparties, Collateral Management, Derivatives, Market infrastructure, OTC Derivatives Clearing

collateral management, CSAs, Finadium, OTC derivatives, topstory

A push/pull situation between dealers, ISDA and the buy-side has reached a new crescendo in recent months as Basel Committee/IOSCO rules have forced a large-scale repapering of bilateral Credit Support…

Collateralised Financing for the Real Economy

May 18, 2017

Dennis Mullany

Collateral Management, Derivatives, Europe, Repo, Securities Lending

collateral management, digitisation, digitization, Euronext, peer to peer, Repo, topstory

Financial markets were designed to support the real economy: that’s their job. Within their collateral services offering, Euronext is working to bring commodities and investment funds into the electronic collateralized…

The business case for tri-party repo flexibility

May 16, 2017

Collateral Management, Europe, Market infrastructure, Repo, Tri-Party Repo, US

collateral, DTCC-Euroclear Global Collateral Ltd, IMS, Inventory Management Service, Repo, topstory, tri-party, tri-party repo, US

Building on our conversations with dealers on what DTCC-Euroclear Global Collateral Ltd’s Inventory Management Service (IMS) could offer them, we looked further at the business rationale for why US market…

EU relaxes derivatives rules – smart economic policy or a reaction to global competition?

May 8, 2017

Central Counterparties, Collateral Management, Derivatives, EMIR, Europe, Investments

CCPs, Clearing, collateral, derivatives, EMIR, Europe, topstory

The European Union last week proposed simpler and more efficient derivatives rules, a move that is widely accepted as helpful for a wide range of corporations, pensions and smaller banks.…

Finadium: Scenarios for the Next Collateral Crisis – download a free excerpt

May 4, 2017

Central Counterparties, Collateral Management, Derivatives, Investments, Liquidity Management, Market infrastructure, Regulatory, Repo, Technology

CCPs, Central Banks, collateral management, dealers, Regulatory, Repo, technology, topstory

A new research report from Finadium looks at scenarios for a full-blown collateral crisis that could arise over the next two years. These scenarios are all based on real-world situations…

Investors in Securities Lending: NYC versus London (Premium)

May 1, 2017

Anna Reitman

Collateral Management, Regulatory, Securities Lending, Technology

Basel Committee, Basel III, blockchain, Direct repo, Finadium Investors in Securities Lending, fintech, FISL, peer to peer, Regulation, topstory

Political upheaval, regulatory storms, a low interest rate environment, low yields, and struggling revenues are common to both sides of the pond. But so is a dose of measured optimism…

Time for the buy-side to take collateral responsibility in securities finance

April 24, 2017

Stephen Malekian

Collateral Management, Derivatives, Investments, Repo, Securities Lending, Technology

buy-side, collateral, CSAs, derivatives, Elixium, Repo, Securities Lending, technology, topstory

The buy-side has an opportunity to take control of its own collateral activity, bringing both financial and operational benefits. Breaking this process down shows that a robust collection of tools…

HQLAx and R3 make their move on a collateral blockchain: will this work?

April 11, 2017

Blockchain, Collateral Management, Market infrastructure, Settlements

blockchain, collateral, Digital Asset, DTCC, HQLAx, R3, topstory

HQLAx and R3 announced last week that they have tested a blockchain-based collateral trading system with a consortium of five banks. The press release revealed enough that with a little…

Does the Direct/Peer to Peer market need standardized contracts for success or will customized contracts be enough?

April 10, 2017

Collateral Management, Repo, Securities Lending, Technology

agreements, All to All, collateral, contracts, direct, peer to peer, topstory

An interesting point emerged at our Investors in Securities Lending Conference last week on the Direct/Peer to Peer/All to All panel: some platforms want participants to sign a standardized contract…

Highlights and takeaways from the Finadium 2017 Industry Conference (Premium)

March 22, 2017

Collateral Management, Market infrastructure, Regulatory, Repo, Securities Lending, Technology, US

buy-side, collateral, Finadium Conference, Market infrastructure, Repo, Securities Lending, technology, topstory

Finadium held its annual industry conference yesterday in New York and it may have been the best one yet. The panels were rock solid with valuable content and audience participation…

GlobalCollateral introduces its Inventory Managing Service (IMS): dealers speak on the opportunities and challenges

March 20, 2017

Collateral Management, Europe, Market infrastructure, Repo, Technology, US

collateral management, dealers, DTCC-Euroclear Global Collateral Ltd, Europe, GlobalCollateral, IMS, infrastructure, Repo, topstory, tri-party, US

On December 16th, 2016 Euroclear received regulatory approval from the Securities and Exchange Commission (SEC) to expand its exemptive order to include US equities. This cleared the way for DTCC-Euroclear…

As CloudMargin closes Series A funding, we look at its competitive positioning (Premium)

March 16, 2017

Collateral Management, Technology

AcadiaSoft, CloudMargin, collateral management, Illuminate, technology, topstory

CloudMargin has made a big splash in the collateral management world by being the first real cloud-based player in the space. It has driven competitors to replicate its model and…

Citi’s Jeff Bonaldi on why participate in Finadium’s Investors in Securities Lending Conference

March 7, 2017

Collateral Management, Finadium Event, Repo, Securities Lending

Bonaldi, Citi, FISL, topstory

We spoke with Jeff Bonaldi at Citi agency lending to hear why his firm is sponsoring Finadium’s Investors in Securities Lending Conference next month. For Citi, the event is about…

eSecLending’s Peter Bassler and Simon Lee on why participate in Finadium’s Investors in Securities Lending Conference

February 27, 2017

eSecLending, Finadium Investors in Securities Lending, FISL, topstory

Collateral Management, Finadium Event, Repo, Securities Lending

We spoke with Peter Bassler and Simon Lee at eSecLending to hear why their firm is sponsoring Finadium’s Investors in Securities Lending Conference this April: “coming to this event will…

“Fire Buys of Central Bank Collateral Assets” charts the cost of eligible securities in the market

February 23, 2017

Collateral Management, Europe, Investments

Bundesbank, Central Banks, collateral, Fire Buys, fire sales, topstory

Collateral Management, Risk Management

A recent research paper by the Bundesbank, “Fire Buys of Central Bank Collateral Assets,” shows the pricing and risk impact to securities from large moves by Central Banks to purchase…

New collateral regimes create new systematic risks through the collateral markets

February 22, 2017

Tobias Duchscherer

collateral, risk, topstory

Regulation has introduced a new element of systemic risk in the collateral markets centered on non-bank institutions. Since 2008, financial regulators have used mandatory collateral buffers to increase systemic stability…

Final customer collateral segregation rules published by Canadian Securities Administrators (CSA)

February 21, 2017

Collateral Management, Derivatives, Re-Hypothecation, Regulatory

Canada, collateral, collateral segregation, CSA, Regulatory, topstory

The Canadian Securities Administrators (CSA) has issued final rules around the segregation of customer collateral used to secure or margin cleared derivatives transactions. The rules apply to all registered clearing…

Variation Margin – long anticipated, finally arrives March 1, 2017 – maybe

February 14, 2017

Basel III, Collateral Management, Derivatives, OTC Derivatives Clearing, Regulatory, Risk Management

collateral, Non-Cleared OTC Derivatives, topstory, Variation Margin

Variation Margin (VM) rules for non-cleared OTC derivatives go into effect on March 1, 2017. Maybe. Unless you are in Singapore, Hong Kong, Australia… and several other jurisdictions. As of…

J.P. Morgan’s Paul Wilson on why participate in Finadium’s Investors in Securities Lending Conference

February 13, 2017

Collateral Management, Finadium Event, Repo, Securities Lending

FISL, JP Morgan, Paul Wilson, topstory

We asked Paul Wilson of J.P. Morgan why his firm is sponsoring Finadium’s Investors in Securities Lending Conference this April. He says the opportunities are there for clients committed to…

Margin Optimization and the Cost of the Trade

February 9, 2017

Central Counterparties, Collateral Management, Derivatives, Technology

CCPs, collateral optimization, Margin, Margin optimization, OTC derivatives, technology, topstory

Banks have largely absorbed the Leverage Ratio and the Liquidity Coverage Ratio and are taking on the next challenge: maximizing their balance sheet efficiency in a return to profitability. One…

How worried should we be about re-hypothecation? Notes on the FSB’s recent report and recommendations

January 30, 2017

Basel III, Collateral Management, Financial Stability Board, Market infrastructure, Re-Hypothecation, Regulatory, Securities Lending, Systemic Risk

Financial Stability Board, Lehman, Rehypothecation, Securities Lending, topstory

Collateral Management, Technology

The subject of re-hypothecation of customer assets by banks and brokers has always been an uncomfortable one. While professionals and regulators have long understood that re-hypothecation is essential to financing…

Towards a Centralised Exchange for Collateral

January 26, 2017

Martin Seagroatt

Broadridge, collateral, collateral exchange, technology, topstory

A number of initiatives to improve the matching of collateral supply with demand have begun to move forward in recent years. However, the system is still fragmented with a lack…

Securities Finance Monitor Magazine Edition 5, our technology special, is now online

January 17, 2017

Asia, Basel III, Collateral Management, Europe, Repo, Securities Lending, Tri-Party Repo, US

Asia, Basel III, collateral management, Dodd-Frank, Europe, Regulation, Repo, Securities Lending, technology, topstory, US

Securities Finance Monitor Magazine Edition 5, our technology special, is now online. Hard copies will be distributed at Deutsche Borse’s Global Funding and Finance Summit and at our upcoming events…

Finadium: Collateral Management in Asia: Survey Results and Country Best Practices

January 16, 2017

Asia, Collateral Management, Regulatory

Asia, banks, cash, collateral management, non-cash, standardized baskets, topstory

Finadium asked market participants about preferences in posting and receiving collateral, the roll out of collateral optimization and their interest in creating a standardized Asian collateral basket across the region.…

Bank repo spreads are widening, but do clients have to pay the bill? Here is the Elixium alternative

January 12, 2017

Stephen Malekian

Collateral Management, Investments, Repo, Technology

Balance sheets, Elixium, Repo, spreads, technology, topstory