A Map of Collateral Uses and Flows

Andrea Aguiar (andrea.aguiar@morganstanley.com), Richard Bookstaber (rbookstaber@gmail.com), Dror Y. Kenett (dror.kennett@ofr.treasury.gov) and Thomas Wipf (thomas.wipf@morganstanley.com)
Additional contact information
Andrea Aguiar: Morgan Stanley
Richard Bookstaber: Regents of the University of California
Dror Y. Kenett: Office of Financial Research
Thomas Wipf: Morgan Stanley

No 16-06, Working Papers from Office of Financial Research, US Department of the Treasury

Abstract: All flows of secured funding in the financial system are met by flows of collateral in the opposite direction. A network depicting secured funding flows thus implicitly reveals a network of collateral flows. Collateral can also be presented as its own network to show collateral arrangements with bilateral counterparties, triparty banks, and central counterparties; the purpose and incentives of collateral exchanges; and participants involved. We create a collateral map to show how this function of the financial system works, especially with secured funding and derivatives activity. This paper provides insights into the increased demand for collateral, the reduced capacity for banks to act as collateral intermediaries, and examples of risks and vulnerabilities in collateral flows.

Keywords: central counterparties (ccp); maps; collateral; margin lending; securities lending (search for similar items in EconPapers)
Pages: 26 pages
Date: 2016-05-26
New Economics Papers: this item is included in nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://www.financialresearch.gov/working-papers/f ... -Collateral-Uses.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ofr:wpaper:16-06

Access Statistics for this paper

More papers in Working Papers from Office of Financial Research, US Department of the Treasury Contact information at EDIRC.
Bibliographic data for series maintained by Corey Garriott (corey.garriott@ofr.treasury.gov).