Almost 40% of banking delegates polled at an industry conference covering the Asia Pacific region say their institution has no access to a collateral optimization system.
Sourcing the most appropriate collateral to cover global exposures is still a major priority for most financial institutions in Asia, according to the poll at Clearstream’s Global Securities Financing conference in Singapore. The conference brought together more than 150 delegates - representing pan-regional institutions, infrastructures, investment banks, universal banks and central banks - from across the Asia-Pacific region, to discuss collateral management and securities lending developments both in the Asia-Pacific and more globally.
More than 92% of industry players in Asia say sourcing appropriate collateral to meet new industry practices is a high or very high priority
The delegates said identifying the right type of collateral was either a “very high” or “high” priority for their organization.
Most of the financial experts see an increasing role for Asian securities in the global supply of available collateral for the banking industry.
Additionally, in the light of upcoming regulatory changes across much of the world requiring greater collateralization of trading exposures, 38.7% of the delegates said their institution had no access to a collateral optimization system. Collateral optimization enables the most appropriate collateral to be identified, allocated and then substituted automatically to ensure exposures are covered in the most efficient way.
Stefan Lepp, head of Global Securities Financing at Clearstream, said the poll results clearly demonstrated that overcoming the collateral challenge was a global issue and that Asian securities would play an increasingly important role in the overall collateral supply. “We know that there is plenty of collateral in the market – but much of it is fragmented and so difficult to unlock and mobilize which means institutions are losing money through inefficient collateral management,” he said.