Collateral

Opening new frontier markets and sustaining existing markets requires dynamic collateral management to reduce counterparty risk exposure and optimise the assets held as security

Collateral is an everyday feature of transactions. Efficient use of collateral requires proper management of data and systems as well as legal certainty. Collateral optimisation depends on each of these and key requirements include:

  • Creation of a golden source of collateral agreement data
  • Collateral enforceability flag management in systems that feed into regulatory capital calculations
  • Efficient use of supporting legal opinions in respect of netting and collateral enforceability
  • Proper use of contract data to fully understand the implications of key clauses that impact collateral requirements e.g. credit rating downgrade provisions
  • Variation Margin Protocol management
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