Outsourcing alternatives

With the use of collateral in derivatives transactions rising steadily, a variety of platforms has sprung up to enable small and medium-sized companies, hedge funds and banks to outsource their collateral management requirements. By Duncan Wood


There was blood in the water for some time prior to the collapse of Long-Term Capital Management (LTCM) in 1998. The hedge fund's main banks circled like sharks, with the result that the normally routine practice of collateral management suddenly became a critical activity. Margin calls were coming in thick and fast. More often than not, the banks would call for more collateral than they were entitled to – and LTCM's collateral managers had the unenviable task of ensuring the banks didn't bleed

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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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