Lombard Risk Management Adds Collateral Optimization Module

Lombard Risk Management has launched a collateral optimization module for COLLINE, its collateral management and clearing offering.
By Janet Du Chenne(59204)
Lombard Risk Management has launched a collateral optimization module for COLLINE, its collateral management and clearing offering.

COLLINE provides end-to-end, cross product (OTC derivatives, repo and securities lending) collateral management and clearing. COLLINE is a consolidated solution for mitigating exposure risk while satisfying the growing demand for multiple/global entities, cross-product margining, clearing, initial margin calculation, optimization, master netting, MIS reporting, dispute management and electronic messaging.

Lombard Risk COLLINE optimization module aims to address the increasing pressures on both the availability and the cost of collateral by incorporating real-time algorithmic calculation of optimal inventory utilization and collateral allocations to:

– Improve liquidity by optimization use of all available assets, across all business lines

-Reduce the cost of collateral program by calculating ‘cheapest to deliver’/’most expensive to hold’

– Match client investment strategies, and adapt to changing market conditions and business priorities

– Reduce the operational burden of collateral allocation processes

– Bring the providers and consumers of collateral together utilizing a single technology platform

The flexible design is intended for use as both a front office and back office tool, for firm-wide and cross-product inventory consolidation and optimization, and as an integral operational tool to identify the best asset to use in response to a margin event.

John Wisbey, CEO, Lombard Risk explains: “Collateral is simultaneously becoming more expensive and harder to source, creating the so-called ‘collateral squeeze’. COLLINE’s optimization module enables real-time determination of the most optimal asset to be used, in any scenario, according to user-defined and evolving priorities.”

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