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elearning > Collateral management

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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.

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Course Summary

Collateral menuCollateral explainedCollateral margin calls

Collateral valuationsCollateral movementsCollateral 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