OTC Derivatives – Collateral Optimization
Build, buy, or outsource – How should buy-side firms decide?
With increased collateral requirements potentially changing the way firms trade swaps, it is imperatives that buy-side firm inventory their enterprise-wide collateral pool and analyze the cost of their collateral. This paper outlines:
- Estimating the cost of collateral
- Defining collateral cost index
- Business case for collateral optimization
- Core capabilities for collateral optimization
- Challenges in building collateral optimization capabilities
- Road ahead for buy-side firms
Download this paper for insights into how buy-side firms are faced with challenges such as whether to build internal collateral management capabilities, continue to rely on clearing brokers for collateral services, or completely outsource a function that is not a core competency.