Finding just-right collateral is key, say Asian conference delegates
24 April 2013 Singapore
Image: Shutterstock
Sourcing the most appropriate collateral to cover global exposures is still a major priority for most financial institutions in Asia, according to a poll of banking professionals at Clearstream’s Global Securities Financing (GSF) Conference Asia in Singapore.
Some 92.6 percent of the delegates, who represented pan-regional institutions, infrastructures, investment banks, universal banks and central banks, expressed that identifying the right type of collateral was either a “very high” or “high” priority for their organisation.
Additionally, in the light of upcoming regulatory changes across much of the world requiring greater collateralisation of trading exposures, 38.7 percent of the delegates said their institution had no access to a collateral optimisation system. Collateral optimisation enables the most appropriate collateral to be identified, allocated and then substituted automatically to ensure exposures are covered in the most efficient way.
The results were borne out in debates during the event on 23 April, the fourth annual Clearstream GSF Conference Asia in Singapore. More than 150 delegates attended from across the region to discuss collateral management and securities lending developments both in the Asia-Pacific and more globally.
Stefan Lepp, head of Global Securities Financing at Clearstream said the poll results clearly demonstrated that overcoming the collateral challenge was a global issue and that Asian securities would play an increasingly important role in the overall collateral supply.
“We know that there is plenty of collateral in the market, but much of it is fragmented and so difficult to unlock and mobilise which means institutions are losing money through inefficient collateral management,” he said. “Discussing these issues with industry delegates in the Asia-Pacific region at another successful GSF Conference was not only very constructive but also encouraged us that we are definitely on the right track with the development of our flexible and open Global Liquidity Hub.”
Some 92.6 percent of the delegates, who represented pan-regional institutions, infrastructures, investment banks, universal banks and central banks, expressed that identifying the right type of collateral was either a “very high” or “high” priority for their organisation.
Additionally, in the light of upcoming regulatory changes across much of the world requiring greater collateralisation of trading exposures, 38.7 percent of the delegates said their institution had no access to a collateral optimisation system. Collateral optimisation enables the most appropriate collateral to be identified, allocated and then substituted automatically to ensure exposures are covered in the most efficient way.
The results were borne out in debates during the event on 23 April, the fourth annual Clearstream GSF Conference Asia in Singapore. More than 150 delegates attended from across the region to discuss collateral management and securities lending developments both in the Asia-Pacific and more globally.
Stefan Lepp, head of Global Securities Financing at Clearstream said the poll results clearly demonstrated that overcoming the collateral challenge was a global issue and that Asian securities would play an increasingly important role in the overall collateral supply.
“We know that there is plenty of collateral in the market, but much of it is fragmented and so difficult to unlock and mobilise which means institutions are losing money through inefficient collateral management,” he said. “Discussing these issues with industry delegates in the Asia-Pacific region at another successful GSF Conference was not only very constructive but also encouraged us that we are definitely on the right track with the development of our flexible and open Global Liquidity Hub.”
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