To address these concerns, the Financial Markets Act was promulgated and regulation was passed to include the clearing through a central counter party and to record all the financial transactions of OTC derivatives contracts in a Trade Repository. Collateral optimisation In collateral markets, “collateral optimisation” has become a key objective.
Not only do banks invest in systems that optimise the way in which their collateral can be utilised, but vendors and central securities depositories now also provide these services to their clients. These smart systems have built-in intelligence which optimises the way in which the collateral is applied and will substitute assets if required.