4sight Financial Software has launched a collateral optimization module for its Xpose Collateral Management System.
Users of the system can now run automated availability checks based on a counterparty’s acceptability and concentration schedules. The system will then propose the cheapest way to deliver collateral within schedule.
The collateral optimization system can also run collateral allocations across all of a firm’s counterparts and across business lines, including securities lending, repo, and OTC/listed derivatives.
This allows the system to show the discrepancy between the firm’s actual collateral cost and optimum collateral cost. The system bases actual collateral cost on current allocations and optimum collateral cost on the best possible allocations.
The module also allows users to run what if scenarios to allocate collateral against underlying clients in the collateral pool without booking any collateral movements. This allows users to collateralize their underlying clients in the optimum manner, within their customers’ acceptability and concentration guidelines. It also identifies any surplus collateral for reinvestment and frees up valuable liquidity.
(JDC)