Collateral Management Systems
End-to-end collateral lifecycle, optimization, and operational frameworks
Collateral Management Systems
Learning Objectives
By the end of this manual, you will understand collateral lifecycle processes and workflows, regulatory requirements for margining and collateralization, optimization strategies for collateral allocation, technology architecture for collateral systems, and operating models for efficient collateral management.
Chapter 1: Collateral Management Fundamentals
Collateral Purpose and Principles
Definition and Scope:
Collateral management encompasses the processes, controls, and systems that govern the end-to-end lifecycle of assets pledged to secure financial obligations:
Collateral management serves multiple purposes including credit risk mitigation by reducing counterparty exposure, regulatory compliance by meeting mandatory margining requirements, liquidity management through efficient allocation of high-quality assets, and trading enablement by supporting cleared and bilateral transactions.