The new era for collateral: Optimisation, funding and yield strategies

Martin Aasly and Xavier Bouthors
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Martin Aasly: Senior Portfolio Manager of Investment Solutions, NN Investment Partners, The Netherlands
Xavier Bouthors: Senior Portfolio Manager of Investment Solutions, NN Investment Partners, The Netherlands

Journal of Securities Operations & Custody, 2022, vol. 14, issue 3, 221-230

Abstract: The growth of regulatory requirements has drastically increased the magnitude of collateral consumption for buy-side market participants in recent years. This has forced companies to rethink their strategies surrounding collateral consumption, trading and collateral yield strategies. With a specific focus on pension and insurance companies, this paper discusses some of the challenges that these institutions are facing and makes actionable recommendations towards collateral optimisation practices. Further, it provides guidance towards prudent liquidity management and raises essential elements for collateral-driven revenue generation.

Keywords: collateral; optimisation; margin; liquidity; cash funding; repo; securities lending; HQLA (search for similar items in EconPapers)
JEL-codes: E5 G2 K22 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jsoc00:y:2022:v:14:i:3:p:221-230

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