Regulatory margin requirements and capital and liquidity issues mean collateral processing and inventory efficiency have become imperative for sell- and buy-side institutions.
ISDA has collected member views to develop a new paper highlighting examples of how firms are applying collateral optimization now and opportunities for future development.
ISDA interviewed several of its members in 2021, covering the following preliminary questions:
- How do you define collateral optimization?
- For end users: Do you have a collateral optimization program? If so, what are some of the challenges and benefits? If not, why?
- For vendors, infrastructure providers, administrators and triparty providers: What services do you provide and what goals and objectives are you helping your clients achieve?
- What could the industry do to promote and implement collateral optimization more widely? What could ISDA do?
The paper is intended to inspire firms to implement or improve collateral optimization programs and to participate in ISDA working groups to help further develop industry practices. The paper sets out various perspectives, including:
- The holistic view taken by a sell-side institution, which includes data sharing and a collaborative reporting structure;
- How a buy-side firm has evolved its use of collateral optimization, including collateral operations and legal resources;
- The role of triparty providers; and
- The needs of buy-side firms and the challenges they face.
To download the full paper, please fill out the details below:
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