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Benefits
Collateral Operations consolidates legal, collateral, settlements and reconciliation information into one solution, enabling firms to maximize the use of collateral inventory, minimize operational risk, and support the growing role of collateral programs across the enterprise.
Reduces credit risk
Minimize exposure when dealing with weaker counterparties, market volatilities and/or when managing long dated transactions. Through a workflow that manages margining information across all business lines, Collateral Operations enables institutions to successfully anticipate and mitigate credit losses.
Enhances risk-based decision making
Collateral Operations provides a consistent method to accurately capture data and documents from all users across the trading book. Senior officers and collateral managers gain timely access to collateral-based information, enhancing risk-based decision making and reducing operational costs.
Increases business opportunities
Collateral Operations supports the intelligent analysis and approval of new business through higher risk trades. These opportunities include: trading with existing counterparties where credit lines are full; expanding customer base to those who do not meet normal credit criteria; conducting business with counterparties who insist on collateral agreements; and the use of advanced rehypothecation techniques to automatically allocate collateral to margin calls and mitigate outstanding credit exposures.
Optimizes liquidity and inventory management
Changes in the credit rating of a counterparty or institution can impact margin demands. Collateral Operations provides banks with the capability to identify potential shortfalls in available collateral, specify return dates to internal borrowers, and reduce losses by eliminating exposures before they happen. This optimization can also take place by using the solution to collateralize inter-bank exposures, encouraging dealers to conduct more end-user business by reducing risk levels and retaining liquidity.
Creates regulatory capital savings
Financial institutions obtain regulatory capital benefits when using collateral, particularly under Basel II where there is increased coverage of the types of collateral to which capital adequacy haircuts can be applied, and increased granularity in the definition of those haircuts. As a solution dedicated to reducing operational and credit risk, Collateral Operations helps translate collateral use benefits into lower capital charges.
Related Downloads
Collateral Operations Brochure
Algo Collateral Fact Sheet
Comprehensive software solution to manage collateral for banks, insurance providers, pension funds and asset managers.
Featured Case Study
Ready to Comply
Credit Suisse First Boston benefits from a proactive approach to regulatory compliance.