Citi explores the key challenges and strategies available in the market for optimal collateral management with respect to costs arising from technology and human capital needs.
The use of collateral in securities lending programmes is shifting from cash to reverse repurchase agreements.
The global move towards central clearing, and the posting of margin on uncleared OTC derivatives, sees asset managers increasingly looking to outsource collateral management.
The supply of securities is now healthy, particularly in equities, but demand to borrow them remains relatively weak, says the bank’s global head of financing and markets products.
Company veteran Michael Schroeder has relocated from New York to take up the post.
Asset managers are also increasingly seeking derivatives-processing services, according to HSBC and JP Morgan.