Collateral Management

European regulation of Securities Financing Transactions (SFTs) is having its desired effect, which is a near gold standard of risk management. Unfortunately, it’s at the cost of market vibrancy. A…

In collateral management and trading, the build vs. buy debate is over and the vendors have won

February 14, 2018

kjarnagin@finadium.com

buy vs. build, collateral management, collateral trading, technology, topstory, vendors

For years, capital markets firms have asked themselves whether it was better to build their own collateral management solutions or purchase vendor offerings. We’ve been in detailed, heated meetings on…

The Move to Cloud Born Microservices in Collateral Management

February 12, 2018

Alan Sheehan

Calypso, collateral management, microservices, technology, topstory

Bimal Kadikar, collateral management, inventory management, topstory, transcend street solutions

The financial technology industry is seeing a move away from one-size-fits-all enterprise systems to cloud-native microservices based on the separation and segmentation of individual tasks. While these microservices can also…

Revisiting the Importance of Inventory Management in Collateral and Liquidity

February 8, 2018

Bimal Kadikar

Collateral Management, Operations, Technology

Inventory management is a cornerstone of securities finance, funding and collateral management, but often gets little attention until it is too late. This should not be the case, as inventory…

Elixium’s Stephen Malekian: All to All will be a new pillar of the collateral trading market

February 1, 2018

Collateral Management, Repo

All to All, Elixium, peer to peer, Stephen Malekian, topstory

Finadium’s Josh Galper spoke with Stephen Malekian of Elixium to hear his views on buy-side market adoption of All to All, trading patterns, and the growth of the collateral ecosystem.…

SFM Magazine, Winter 2018, is now online

Securities Finance Monitor Magazine, Winter 2018, is now online. This edition, our Technology Special, features articles on what protectionism means for efficiency in global capital markets, a proposal for smart…

A Proposal for Smart Regulation in European SFT Markets

January 25, 2018

Michael Cyrus

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

Europe, LCR, Leverage Ratio, Michael Cyrus, NSFR, Regulation, SFT, SFTR, topstory

In a post-crisis era, Europeans must focus on efficient and smart regulation in Securities Financing Transactions (SFT) to support competitive financial markets. This can be achieved but requires regulatory attention…

Finadium welcomes Kurt Jarnagin as Senior Consultant in Frankfurt

January 23, 2018

Collateral Management, Uncategorized

Finadium, Frankfurt, Kurt Jarnagin, topstory

Finadium is pleased to announce that Kurt Jarnagin has joined the firm as a Senior Consultant. Based in Frankfurt, Kurt has already begun work on Finadium research projects and consulting…

Artificial Intelligence is one way of several to bridge the manual to STP gap (Premium)

January 9, 2018

Artificial Intelligence, Collateral Management, Derivatives, Operations, Technology

AI, artificial intelligence, ION Trading, STP, Straight-through processing, topstory, True-PTS

Big banks, established vendors and start-ups are seeing a similar opportunity: technology should be used to get manual and voice transactions into electronic systems for post-trades processing, particularly for collateralized…

Networked collateral ecosystems will strengthen in 2018

January 2, 2018

collateral management, networking, technology vendors, topstory

We’re seeing growing evidence from users, vendors and infrastructure providers that 2018 will be big year for creating a networked collateral ecosystem across multiple product types. This trend has been…

More firms get serious about real-time exposure management for collateral (Premium)

December 21, 2017

Basel III, CCP, Collateral Management, Technology

Baton, Citi, CME, collateral management, exposure management, Pirum, topstory

A press release from Baton Systems last week echoes what Pirum has been saying for a while: there is a significant amount of cash to be saved in real-time exposure…

A quick primer on “settled-to-market” vs. “collateralized-to-market” in counterparty credit risk (Premium)

December 18, 2017

Basel III, CCP, Collateral Management, Derivatives

capital, CEM, collateralized to market, Leverage Ratio, Settled to market, topstory

CCPs have changed or are changing their rules on Variation Margin to allow “settled-to-market” (STM). This is a useful change that will save money, and complements the desire of firms…

Collateral management technology vendors on blockchain and Artificial Intelligence (Premium)

December 14, 2017

Artificial Intelligence, Blockchain, Collateral Management, Technology

artificial intelligence, blockchain, collateral management, technology, topstory

For our recently released survey of 21 collateral management technology vendors, we asked how far vendors had come in monitoring, testing or going live with a blockchain or Artificial Intelligence…

Finadium: Collateral Management Technology Vendors in 2017: A Finadium Survey

December 13, 2017

collateral management, Finadium, technology, topstory

Finadium has conducted its fifth industry-wide survey of collateral management technology vendors, providing a comparative look at the development of this sector. The survey provides readers with a product summary…

Finadium webinar replay and slides: Implementing Change in 2018 (Premium)

December 7, 2017

Basel III, Collateral Management, Prime Brokerage, Repo, Securities Lending, Technology, Tri-Party Repo

collateral management, Finadium, Repo, Securities Lending, topstory

We delivered two client webinars today on implementing change in 2018. 2017 was a big year, with many moving parts in the collateralized trading markets across the business, regulation and…

From Brussels to New York, our observations on Peer to Peer and European government regulation (Premium)

November 16, 2017

Collateral Management, Europe, Repo, Securities Lending, US

CFTC, collateral, Europe, peer to peer, Regulation, SBL, Securities Lending, topstory

Between the Euroclear collateral conference held in Brussels this Monday and Tuesday, plus our own conversations in New York, we’ve digested a lot of feedback on collateralized trading markets. Here…

Why you should care about off-the-run US Treasury trading platforms

November 15, 2017

Collateral Management, Liquidity Management, US

Liquidity, LiquidityEdge, off-the-runs, OpenDoor, topstory, US Treasuries

Two press releases last week highlight the importance of liquidity in off-the-run US Treasuries. As the battle of the platforms is heating up, the winners will be holders of off-the-runs…

Finadium Big Ideas Quarterly Q4 2017 now online

November 6, 2017

Asia, Collateral Management, Derivatives, Europe, Regulatory, Repo, US

big ideas, collateral management, derivatives, Finadium, Repo, Securities Lending, topstory

Our quarterly presentation on research, news and events. Finadium Securities Finance, Collateral and Derivatives subscription clients can log in and download the presentation here If you are already logged in,…

The EU Systemic Risk Board on collateral premia: some logical conclusions and a few open questions

November 2, 2017

Jonathan Cooper

Collateral Management, Europe, Repo, Systemic Risk

collateral management, EU Systemic Risk Board, Europe, GC, Repo, risk, scarcity, specialness, topstory

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

August 17, 2017

CCP, Collateral Management, Custodians, Derivatives, Europe, Market infrastructure, Operations, Risk Management, Settlements, UK

CCPs, Euroclear, Initial Margin, LCH, LCH.Swapsclear, topstory, Variation Margin

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, CCP, 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, Pensions, 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

CCP, 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

CCP, 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

CCP, 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