Sungard's Daniel Parker on why this is the time for action not complaining.
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
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
What is exponentially more complex today is that the types
of acceptable collateral that may be pledged to enforce a
promise are being limited – specifically for those
promises known as swaps or derivatives. Changes in collateral
usability are sometimes regulatory-imposed, and other times
constitute a change in risk management practice. Either way,
the result is a migration toward enhanced risk and valuation
sensitivity that invariably fuels technology-based process
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