The purpose of this seminar is to give you a thorough introduction to the collateral management process and a good understanding of how the use of collateral can be optimized and integrated with trading, liquidity management, credit risk, market risk and finance activities.
We start with general introduction to collateral management and a review of the market and regulatory developments that have radically changed the way that financial services organizations view collateral management. We also present a case study that we shall be revisiting throughout the seminar as practical illustration of how to effectively implement the collateral management process. We look at important new regulations such as EMIR and Dodd-Frank and discuss the possible impacts that these regulations will have on banks'' and other institutions' use of collateral and, more broadly, on their business models and business conducts.
We then explain the process of collateral management. We suggest policies for choosing collateral and explain how this collateral is effectively managed throughout the collateral lifecycle. We also discuss important legal and documentation issues relating to collateral, including the use of ISDA documentation.
On day two, we first turn our focus to collateral optimization techniques, explaining how to ensure that collateral assets are deployed as efficiently as possible. This includes methods for reducing "collateral fragmentation", effective re-use or re-hypothecation of collateral, and the use of collateral swaps to obtain more efficient allocation of scarce, high-quality assets.
Finally, we explain how banks and other institutions can gain a competitive edge in securities and derivatives trading through efficient collateral usage and how the business opportunities that arise from the increasing need for collateral solutions can be harvested. We also discuss how banks can optimize the use of regulatory and economic capital under the "new collateral paradigm".