BNY Mellon drastically reduces intraday credit
12 May 2015 New York
Image: Shutterstock
BNY Mellon has completed its tri-party repo risk reduction initiative in support of the recommendations of the task force for Tri-Party Repo Infrastructure Reform.
As part of these efforts, BNY Mellon reduced the secured credit extended in the tri-party repo market by $1.44 trillion, or 97 percent, resulting in the practical elimination of such credit in its programme, which was a critical goal the task force outlined in 2012.
This milestone marks the conclusion of a multi-year cooperative effort by BNY Mellon, its clients and other market participants to restructure the US tri-party repo market.
In addition to the intraday credit reduction, BNY Mellon introduced a wide range of enhancements including Automated Deal Matching, which captures instructions independently from repo counterparties and ensures all parameters of a tri-party repo trade match prior to settlement.
This enhancement is intended to improve the timing, transparency and accuracy of such trades.
Elsewhere, Auto Collateral Exchange will allow tri-party repo trade collateral to automatically substitute securities for cash, significantly upgrading the way collateral is optimised and allocated.
Other enhancements such as rolled trade functionality, rebalancing capabilities and a new settlement algorithm have also been introduced.
"As the market leader for tri-party collateral management, we embraced the task force recommendations and proactively addressed the necessary changes without disrupting the market," said Brian Ruane, CEO of broker-dealer and tri-party services at BNY Mellon.
"Through a comprehensive set of operational and technology improvements, as well as the strong partnership with our clients and other market participants, we have significantly reduced systemic risk and positioned our clients for success moving forward in this market."
BNY Mellon said its strategic focus on aligning its technology and business teams to develop innovative solutions to complex problems helped drive the transformation of the company's tri-party repo offerings.
Kevin Fedigan, chief information officer of broker-dealer services at BNY Mellon, added: "In addition to properly aligning our technology and business resources, keys to the programme's success included the systematic phasing in of incremental solutions, creating close partnerships with clients and industry participants in defining and confirming requirements, communicating actively with all stakeholders throughout the process, and delivering value-added capabilities that drove adoption."
BNY Mellon broker-dealer and tri-party services is the leading provider of tri-party collateral management services, servicing more than $2 trillion in tri-party balances worldwide.
As part of these efforts, BNY Mellon reduced the secured credit extended in the tri-party repo market by $1.44 trillion, or 97 percent, resulting in the practical elimination of such credit in its programme, which was a critical goal the task force outlined in 2012.
This milestone marks the conclusion of a multi-year cooperative effort by BNY Mellon, its clients and other market participants to restructure the US tri-party repo market.
In addition to the intraday credit reduction, BNY Mellon introduced a wide range of enhancements including Automated Deal Matching, which captures instructions independently from repo counterparties and ensures all parameters of a tri-party repo trade match prior to settlement.
This enhancement is intended to improve the timing, transparency and accuracy of such trades.
Elsewhere, Auto Collateral Exchange will allow tri-party repo trade collateral to automatically substitute securities for cash, significantly upgrading the way collateral is optimised and allocated.
Other enhancements such as rolled trade functionality, rebalancing capabilities and a new settlement algorithm have also been introduced.
"As the market leader for tri-party collateral management, we embraced the task force recommendations and proactively addressed the necessary changes without disrupting the market," said Brian Ruane, CEO of broker-dealer and tri-party services at BNY Mellon.
"Through a comprehensive set of operational and technology improvements, as well as the strong partnership with our clients and other market participants, we have significantly reduced systemic risk and positioned our clients for success moving forward in this market."
BNY Mellon said its strategic focus on aligning its technology and business teams to develop innovative solutions to complex problems helped drive the transformation of the company's tri-party repo offerings.
Kevin Fedigan, chief information officer of broker-dealer services at BNY Mellon, added: "In addition to properly aligning our technology and business resources, keys to the programme's success included the systematic phasing in of incremental solutions, creating close partnerships with clients and industry participants in defining and confirming requirements, communicating actively with all stakeholders throughout the process, and delivering value-added capabilities that drove adoption."
BNY Mellon broker-dealer and tri-party services is the leading provider of tri-party collateral management services, servicing more than $2 trillion in tri-party balances worldwide.
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