IMN: Pledge an increasingly viable alternative to market
13 September 2018 London
Image: Shutterstock
Pledge is becoming an increasingly viable alternative to market, according to one panellist at this year’s annual European Securities Finance and Collateral Management Conference.
The panellist said that, although the economics might stack up staying where you are, “it does make sense to look at alternatives, and sovereign or state type entities are more likely to want that”.
One panelist agreed, but added: “Pledge has been designed by borrowers, but beneficial owners want to commit to certain transaction types.”
In a separate panel, which looked at evaluating collateral management and optimisation strategies in today’s market, a panellist discussed the recent implementation of phase three of initial margin (IM) requirements for non-centrally cleared derivatives, which formally began on 1 September.
This continues a long-term process launched in response to the global financial crisis of 2008-9, when the G20 agreed to a financial regulatory reform agenda covering the over-the-counter derivatives markets and market participants.
The panellist said phases four and five will have a major impact in the way banks are organised to understand collateral.
The panellist said that, although the economics might stack up staying where you are, “it does make sense to look at alternatives, and sovereign or state type entities are more likely to want that”.
One panelist agreed, but added: “Pledge has been designed by borrowers, but beneficial owners want to commit to certain transaction types.”
In a separate panel, which looked at evaluating collateral management and optimisation strategies in today’s market, a panellist discussed the recent implementation of phase three of initial margin (IM) requirements for non-centrally cleared derivatives, which formally began on 1 September.
This continues a long-term process launched in response to the global financial crisis of 2008-9, when the G20 agreed to a financial regulatory reform agenda covering the over-the-counter derivatives markets and market participants.
The panellist said phases four and five will have a major impact in the way banks are organised to understand collateral.
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