Collateral Management and Hypothecation
Airport lounges are always good for catching up on stuff. Daniel Parker’s article, “Are Your Collateral Management and Hypothecation Methods Ready for Prime Time?” has been in my reading queue for some time. What should keep reads awake is the final sentence of Daniel’s opening paragraph:
prolific revenue opportunities presented in years
Further, given the closing paragraph, one can only assume pre-current-post discussion by management and techie around budgets, architectures, and the likes to take advantage of the opportunity that presents itself as part of the new Dodd-Frank world:
Ultimately, it is necessary for all participants considering rehypothecation, or any aspect of collateral waiver, as part of an underlying collateral management or optimization strategy to consolidate automation across business lines and asset classes. This accomplishes a true cost-benefit justification. Both buy-side and sell-side firms are moving toward automating collateral pools and portfolios, trade reconciliation, and valuation; including real-time liquidity monitoring and account segregation as distinct opportunities.
Finally, consider a read of FOREYE’s “Benefit from one of the biggest opportunities in 2013: Collateral Management” paper.