Collateral Management – Managing Risk in Stressed Markets

The situation in Ukraine and the impact to global markets has yet again sharpened the industry focus on risk and collateral management.  We send our heartfelt wishes to those affected and look to help our clients navigate these challenging conditions.

As a result of the global market stress, we’ve seen an increasing level of incoming queries from firms looking to mitigate risk in fast changing markets. 

Specifically, as our CollateralConnect Service offers real-time, automated and comprehensive collateral visibility,  clients are using it to determine what collateral is being allocated intraday and what could be allocated tomorrow given current schedule eligibility. We are also monitoring and flagging any changes to collateral schedules as they are implemented, at a program level.

With over 6,000 collateral schedules digitised to date, and granular reference data supporting  over 200,000 allocated securities, CollateralConnect is being utilised to monitor specific portfolio exposures including risk by country, issuance, sector, currency, credit rating and more.  If tighter controls are required, allocated collateral can be validated against existing schedules or, alternatively, schedules can be identified where a change to eligibility is required to reduce specific risks.

Todd Crowther, Head of Corporate Development & Collateral Services at Pirum said, “We have received an increased level of interest where clients are looking for real-time collateral management functionality with advanced analytic tools to help them more effectively understand, measure and manage their day-to-day exposure risks, limits and their regulatory compliance obligations.”

 

Scott Brown

Director, Business Development