Protect and survive

Various initiatives are under way to encourage greater use of collateral and improve portfolio reconciliation. What are banks and technology vendors doing to meet industry targets? By Ryan Davidson

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Collateral management to mitigate counterparty credit risk has seen a renewed focus following the demise or near failure of several derivatives dealers over the past year. The extreme volatility witnessed during the financial crisis has caused sharp changes in the market values of derivatives trades, meaning firms have needed to revalue them and adjust collateral to cover exposures. However, existing collateral management processes were shown to be flawed or inefficient following the collapse of

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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