Are your different trading desks competing for the same collateral? There’s a better way. Introduce the common problem of siloed operations in large financial institutions, where each desk (e.g., derivatives, repo, securities lending) manages its own collateral independently. Explain that this leads to inefficiency, increased costs, and missed opportunities.Explain the drawbacks Higher funding costs from sub-optimal collateral allocation. Inefficient use of high-quality collateral, leading to “collateral hoarding.”
Operational complexity and manual reconciliation between systems. nd Cross-Asset Optimization?
Define the concept: a holistic approach that views all of the firm’s collateral and exposures as a single, unified pool.
Explain the goal: to allocate the cheapest and most efficient collateral to meet margin obligations across all products and business lines.
