elearning > Collateral management

Sub-menu:

Learn about the following:

Why collateral management is important. How collateral management works. The advantages of cross product collateral management. The terms used in collateral management. The advantages and disadvantages of collateral management.

Buy the full e-learning course now for just £14.95+ VAT

If you have already purchased this e-learning course, login to view it.

Course Summary

Collateral menu Collateral explained Collateral margin calls

Collateral valuations Collateral movements Collateral workflow

60 minutes
10 question multiple choice test
Why collateral management is important
How collateral management works
The advantages of cross product collateral management
The terms used in collateral management
The advantages and disadvantages of collateral management

Collateral management - the details

1. Why collateral is important

Managing credit risk
Over-the-counter derivatives
Mark-to-market values and exposures
Why collateral management has grown

2. How collateral works

Importance of documentation (credit support document)
Daily valuations and a regular process
Collateral calls and returns
Why credit exposures are reduced

3. Cross product collateral management

What products are included
Why it’s advantageous
The drawbacks
Types of collateral
Why cash is commonly used
Interest payments on collateral

4. Collateral in action

Trade reconciliation
Portfolio & collateral valuation
Calculating the call amount
Revaluation
Trade flow

5. Collateral terminology

Practical explanation and examples
Dispute resolution
Independent amounts
Minimum transfer amount
Documentation and netting
Threshold amount
Valuation percentage

6. Summary

7. Test

Related Documents

Training Courses > Collateral Management

Quick Guides > Collateral Management

Collateral Management Course - 30th May 2012

19th January 2012

Short courses>Collateral management

Treasury Consulting > Collateral management

The firm identified that counterparty credit exposures on OTC derivatives was adversely affecting the ability to trade. It was agreed that collateral management was a solution. But the firm did not want to invest in a collateral management system and have all the operational support issues.

Mitigate your collateral risk

16th October 2009

Counterparty credit exposure (CCE) is a big issue it's why you have credit limits. When you lend money the risk is clear, will you get repaid? But with over the counter derivatives (like swaps) credit exposures are harder to see but nevertheless they are real. Derivatives with positive mark-to-market values generate credit risk. Why? Because default by the counterparty puts your profit at risk. One solution is collateral management. This involves a regular trade portfolio valuation and a net exchange of margin or collateral between the two parties involved. Collateral management is a process; it mitigates your credit risk but at the same time increases your operational risks. It's too easy to focus on the credit aspect of collateral without identifying what else could go wrong. Let's have a look at ten of the main concerns. It's not an exhaustive list but it may help you identify where improvements can be made.