Collateral Management: A Guide to Mitigating Counterparty Risk

  • 11h 43m
  • Michael Simmons
  • John Wiley & Sons (UK)
  • 2019

Insight into collateral management and its increasing relevance in modern banking

In the wake of recent financial crises, firms of all sizes have adjusted their policies to incorporate more frequent instances of collateral management. Collateral Management: A Guide to Mitigating Counterparty Risk explains the connection between the need for collateral management in order to alleviate counterparty risk and the actions that firms must take to achieve it. Targeted at middle and back office managers seeking a hands-on explanation of the specifics of collateral management, this book offers a thorough treatment of the subject and attends to details such as internal record management, daily procedures used in making and receiving collateral calls, and settlement-related issues that affect the movements of cash and securities collateral. An expert in financial topics ranging from trade lifecycle to operational risk, author Michael Simmons offers readers insight into a field that, so far, is struggling to produce enough expertise to meet its high demand.

  • Presents hands-on advice and examples from a bestselling, internationally renowned author who introduces his third book on operations and operations-related activities
  • Explains the relationship between collateral management and preventing institutional defaults, such as the recent Lehman Brothers downfall

Since 2008, firms have recognized and embraced the importance of collateral management, but this book will provide practitioners with a deeper understanding and appreciation of its relevance.

About the Author

MICHAEL SIMMONS is a financial services operations specialist with expertise in post-trade processes. For over 20 years, he worked at a blue-chip investment bank (S.G. Warburg and Warburg Securities) where he was the manager of Fixed Income (Bond) Operations. Over these two decades of hands-on experience in the field, Mike identified a need for practitioner-oriented education programs on multiple aspects of operations, including the securities trade lifecycle, corporate actions, operational risk and associated controls. He thus began writing and delivering popular training courses, including the Operations Certificate Programme (a 5-day multi-subject examined qualification) for the International Capital Market Association. He is the author of two previous books, namely Securities Operations and Corporate Actions.

In this Book

  • Foreword
  • Introduction
  • Fundamental Collateral Concepts
  • The Nature and Characteristics of Collateral Types
  • Sale & Repurchase (Repo) Trades and Collateral – Introduction to Repo
  • Sale & Repurchase (Repo) Trades and Collateral – Classic Repo Trades
  • Sale & Repurchase (Repo) Trades and Collateral – The Repo Trade Lifecycle
  • Sale & Repurchase (Repo) Trades and Collateral – Stock-Based Classic Repo Trades
  • Sale & Repurchase (Repo) Trades and Collateral – Repo Trade Variations
  • Sale & Repurchase (Repo) Trades and Collateral – The Global Master Repurchase Agreement
  • Securities Lending & Borrowing and Collateral – Introduction to SL&B
  • Securities Lending & Borrowing and Collateral – Principles of SL&B
  • Securities Lending & Borrowing and Collateral – The SL&B Trade Lifecycle
  • Securities Lending & Borrowing and Collateral – Accessing the SL&B Marketplace
  • Securities Lending & Borrowing and Collateral – The Global Master Securities Lending Agreement
  • OTC Derivatives and Collateral – Transaction Types – Introduction
  • OTC Derivatives and Collateral – Transaction Types – Generic Structural Aspects
  • OTC Derivatives and Collateral – Transaction Types – Interest Rate Swaps
  • OTC Derivatives and Collateral – Transaction Types – Credit Default Swaps
  • OTC Derivatives and Collateral – Transaction Types – Foreign Exchange Swaps
  • OTC Derivatives and Collateral – Transaction Types – Cross-Currency Swaps
  • OTC Derivatives and Collateral – Legal Protection – Introduction
  • OTC Derivatives and Collateral – Legal Protection – Master Agreement and Schedule
  • OTC Derivatives and Collateral – Legal Protection – Credit Support Annex
  • OTC Derivatives and Collateral – Static Data
  • The OTC Derivative Collateral Lifecycle
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Pre-Trading – Legal Documentation
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Pre-Trading – Static Data
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Trading – Trade Execution
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Post-Trading – Trade Capture
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Post-Trading – Trade Confirmation/Affirmation
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Post-Trading – Trade/Portfolio Netting
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Portfolio Reconciliation
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Marking-to-Market
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Exposure Calculation
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Receiving Margin Calls
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Issuing Margin Calls
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Holding Collateral
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Post-Trade Execution Events – Introduction
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Post-Trade Execution Events – Novation
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Post-Trade Execution Events – Unwind
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Post-Trade Execution Events – Offset
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Post-Trade Execution Events – Credit Events
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Collateral Substitution
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Throughout Lifetime of Trade – Income & Corporate Action Events
  • OTC Derivatives and Collateral – The Collateral Lifecycle – Trade Termination – Trade Termination
  • OTC Derivatives and Collateral – Legal Documentation
  • OTC Derivatives and Collateral – Regulatory Change and the Future of Collateral – Introduction
  • OTC Derivatives and Collateral – Regulatory Change and the Future of Collateral – Centrally Cleared Trades
  • OTC Derivatives and Collateral – Regulatory Change and the Future of Collateral – Non-Centrally Cleared Trades
  • Glossary of Terms
  • Useful Websites
  • Further Reading
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