Blog

Collateral management update from Basement Headquarters
24/08/2020

The global pandemic has completely changed the way collateral management professionals conduct business. The all-remote work environment has altered the typical fintech project. While many of these changes have been difficult at times to manage for both the client and the vendor, the work-from-home model has allowed additional flexibility, benefiting upgrades and implementations. As we look forward to some type of return to work “normal” in the coming months there…

U, V, or W, what shape will the recovery be?
27/07/2020

In March, when it became evident that the COVID event was disrupting U.S. economic activity, the Federal Reserve (the Fed) conducted a sensitivity analysis (Assessment of Bank Capital during the Recent Coronavirus Event, June 2020), based on a set of scenarios that are more dire and stressful than were implied by then current economic and banking conditions.  For example, it projects a much deeper recession in the second quarter of…

The Shareholder Rights Directive II due to go live on the 3rd of September 2020
07/07/2020

SRD II won’t be postponed! The verdict came from the European Commission earlier this month! Despite the joint letter sent by several post-trade groups and the call to postpone the deadline of SRD II and the Implementing Regulation, the European Commission decided earlier this month to go ahead with the implementation of the directive as originally planned this year on the 3rd of September 2020. “We ask you to consider, as a…

Between the Devil and the deep blue sea
01/07/2020

When it comes to Digital Transformation, the perceived risk for banks and insurers is on one side, eternal damnation for trying, or on the other drowning because they did nothing. 100% Digital challenger fintech brands do not have this issue, but they are struggling to gain market share and move into profitability, because customers are for the moment loyal to the brands they know and grew up with. For the…

Does liquidity scarcity exist, or do you just have to know where to look?
11/06/2020

Collateral Management Question Series It certainly exists as UMR represents a regulatory landscape, the likes of which have never been seen before, which has the collateral pool shuddering at the concept of an unprecedented demand for collateral comprised of high-grade assets and an increase in haircut provisions. While it is noted that increased collateral requirement in the market means greater safeguards against default, conversely, the ever-increasing demand for high-grade collateral also…

EBA introduces new reporting and disclosure templates for June 2020 submission
11/06/2020

The EBA announced on the 2nd June 2020 guideline on “reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis” Published article can be found here.   Why: In response to the need to address negative economic consequences of COVID-19 pandemic, the European Union (EU) and Member States have introduced a wide range of mitigating measures to support the real economy and the financial sector.…

Resilience, a secret to success...
09/06/2020

On 4th March I attended a networking event in London with the topic of “Resiliency”. Little did any of us know then what to happen over the coming weeks and how many of the topics we covered there would come into play. It is now almost two months ago since the world recognized it was in a crisis. A pandemic is a unique sort of crisis. It is acute, global and…

Solvency 2 in Covid-19 Times
04/06/2020

Pending further clarifications of the LTEI rules, EIOPA climbed down ... on the deadlines for publication of regulatory QRT reports. After having obtained in March 2019, a revision of the equity shock rates by the creation of a new long-term share class - called LTEI for Long term equity investment - benefiting from a lightened shock of 22%, France and the Netherlands, still expect to obtain new concessions from EIOPA in…

What are the key challenges that organisations would face when implementing a centralised collateral management infrastructure?
28/05/2020

Collateral Management Question Series For years many firms have considered the move away from siloed processes. However, often such implementations can be costly, time-consuming and turn into multi-year projects. Many institutions still have antiquated infrastructures and internal data issues. Data quality and availability are a real issue throughout the industry and often represent the greatest risk to an organisation’s ability to operate a centralised collateral management infrastructure. Fortunately there are fintech…

VERMEG enhances XBRL service provided free of charge during COVID-19 crisis
27/05/2020

Building on last month’s announcement of the offer of a free of charge XBRL Checker for COREP, FINREP and PRA, we have now added the PRA 110 to this service with immediate effect. The 110 is probably the most complex and comprehensive of the PRA’s Regulatory Returns and this addition will provide significant value to anyone needing to visualise and validate their XBRL files before submitting to the Regulator. VERMEG’s XBRL…