Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016 - (Page 41)

This first article considers the role of collateral and the nature of the changes that are impacting the market now and over the next 12 - 18 months. It also provides some commentary around how innovation is bridging the gap between the new and old operating paradigms. Introduction For some time now, where collateral is concerned, market commentators (and scaremongers) have been commentating on the timing and impact of forthcoming regulatory changes and how they will affect treasury management. Despite all the negative forecasts it seems, with few exceptions for corporate treasurers at least, the management of collateral has remained broadly unchanged during this period. These articles will argue that, despite delays, the status quo will be challenged over the next 12 - 18 months. Further they will argue that, from a Corporate Treasurer perspective, by leveraging advancements being made in the field of collateral management it is possible to materially reduce cost and risk and, at the same time, increase efficiency without major investment in new technology or material disruption to the overall strategic direction of the business. The Basics To better evaluate the significance of the changes that are taking place, first let us understand and assess the role of collateral where it is used to support financial markets activity. In short, collateral is an exchange of risk. Users of collateral are replacing counterparty credit exposure with a series of other risks associated with the management of the collateral itself. The concept being that these new risks, which are operational, legal and liquidity related in nature, can be directly managed where credit exposure cannot. Until recent times, this 'pact' has been relatively straightforward to manage for most corporate treasury functions. The benefits have been material where the values of collateral have remained quite modest, where available liquidity has not caused undue concern and where the operational processes associated with the exchange of margin have been straightforward. - In short, collateral is an exchange of risk. Users of collateral are replacing counterparty credit exposure with a series of other risks associated with the management of the collateral itself. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE This is the first of two articles assessing the impact on a Corporate Treasury function using and managing collateral in an environment where new regulation is driving, directly and indirectly, so much change to conventional business models. N°94 - JUL Collateral management and the Corporate Treasury function. / AUG / SEP 2016 FORUM 41

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016

Cover
Table of contents
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW Philippe Gelis - Kantox - Fintech and the future of banks
FOCUS
Lost in transformation
Everything has a price – a transfer price
Treasury Survey - an unprecedented picture of treasury activities in Luxembourg
FORUM
The impact of negative rates on Treasury and Risks Management Systems
Towards reporting harmonisation?
Understanding the Treasury impact of BEPS
Impacts of Single Resolution Mechanism and Bail-in for European Banks
Supply chain? Not concerned?
Collateral management and the Corporate Treasury function.
Efficiently Managing Cross-Border Payments in Turbulent Times
CORPORATE FINANCE
How Mid-Market Companies Can Efficiently Manage Enterprise-wide FX Risk as they Grow
Investing surplus cash in repos
A wind of technology changes in the treasury management world
Invoicing can be fun….?
Comment améliorer la performance des fonds de pension européens
15 MINUTES WITH O2Finance
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS

Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016