Finding and managing collateral needed to mitigate derivatives exposures is necessitating new technologies and outsourcing models
managing the collateral needed to mitigate derivatives
exposures is necessitating new technologies and outsourcing
models, writes Dan Barnes.
There has been a marked increase in the number of firms that
are used to manage a trade.
Prior to the 2010 Dodd-Frank Act and European Market
Infrastructure Regulation (Emir), which is expected to enter
force at the beginning of 2014, trading OTC was typically a
bilateral arrangement that left firms vulnerable, particularly
if they had used one broker for many services, including
"There are still people trying to get their collateral back
from the Lehman collapse," said Bob Holland, senior product
manager, Fixed Income and Derivatives, for workflow technology
"US clients thinking they had posted collateral with Lehman
Brothers New York found it was with Lehman Brothers London
where there weren't the same segregation rules.
"There were lessons learned, especially for those in the hedge
fund community who had Lehman as a prime broker.
"They did all of their deals in New York, but the New York guys
did deals in London and so that was where the collateral ended
This article is available to subscribers and registered users
Please log in to continue reading.
Not yet registered? Take a free trial.
If you have already taken a free trial you
have ongoing access to the analysis section of FOW.com including this story.
Log in using your details below to read.
Already have an account? |