Some firms are yet to realise the implication of collateral optimisation
By Nick Nicholls, Principal Consultant at
Collateral has become so significant from
a trading, risk and capital management perspective, that
holistic management of collateral is an inevitability.
However, there are process changes needed
to support holistic collateral management and optimisation that
will directly impact the organisational structure, systems
infrastructure, trading and pricing practices of sell-side
The reward of full optimisation requires
closely aligned collateral, financing and trading areas within
an organisation. Some firms however, are yet to realise the
implication of this, and are instead focusing on compliance and
continued operational stability, rather than efficiency and
Investment banks should embrace the
opportunity through the holistic management and optimisation of
collateral. They should begin implementing the process and
infrastructure changes required to achieve this goal, and face
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