In the aftermath of the 2008 financial crisis, the landscape of collateral management has undergone significant transformation as financial institutions strive to bolster their risk mitigation strategies. According to the results published in the material, the focus has shifted towards ensuring the quality of collateral to address the challenges posed by daylight exposure and rehypothecation.
Stricter Eligibility Criteria for Collateral
To navigate these complexities, firms are adopting stringent eligibility criteria for collateral, ensuring that only high-quality assets are utilized in transactions. This approach not only enhances the reliability of collateral but also instills greater confidence among market participants during turbulent times.
Optimizing Operational Processes
Moreover, institutions are optimizing their operational processes to improve efficiency in collateral management. By streamlining workflows and leveraging technology, firms aim to reduce vulnerabilities and enhance their ability to respond swiftly to market fluctuations, ultimately safeguarding their financial stability.
