Collateral and Capital Management
Poor credit ratings have substantially increased the amount of financial liquidity required to provide credit support for commercial transactions, and the need for liquidity has occurred at a time when capital has been the most difficult to obtain. This crisis has been further compounded by the fact that many companies lack the means to access timely, accurate, and complete information about their collateral positions with the counterparties they do business with—positions that are often tracked in disparate spreadsheets that are scattered among individual business units. Additionally, many companies cannot readily obtain a consolidated view of all contractual terms that dictate these collateral requirements.
Whether you are a stable, investment grade company monitoring your unsecured exposure or a sub-investment grade company monitoring your cash flow, it is clear that improved collateral management practices and sophisticated solutions that provide greater transparency to enterprise liquidity and capital management are more important now than ever.
ROME's Collateral Management capability is an integral requirement for effectively managing collateral, active margining, guarantees and other forms of performance assurance. ROME uses contract-by-contract calculations, and maintains both an inbound and outbound perspective. With rich Collateral Management functionality, the ROME solution establishes new levels of support for increasing working capital efficiency and profitability for the overall business.
Facilitate Active Margining
ROME CreditRisk is focused on facilitating the active margining process. The Collateral Request screen depicted below provides an actionable view of all collateral request details including collateral type, amount, and status.
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Calculations, Triggers, Workflows, Notifications
Collateral Management tracks inbound and outbound collateral positions and coordinates all aspects of an active margining process throughout the enterprise. The ROME solution provides a full complement of contractually accurate collateral calculations, including ratings triggers, automated process workflows and event notifications:
- Capital Risk Mitigation enables risk managers to proactively protect their firms from loss while consuming less collateral. Strategies—from netting and setoff to changing collateral types—are presented to users to drive risk reduction.
- Liquidity Resource Planning allows capital managers to understand the key consumers of financial liquidity in the business, perform scenario planning, and make recommendations on how liquidity can be re-deployed to the right business units and teams.
- Strategic Capital Optimization is achieved through the use of analytical and reporting functionality that allows executive managers to strategically balance capital efficiency with risk mitigation to best achieve the company goals.
- Collateral Calculation ensures contractually accurate calculation of collateral held, posted, utilized, and requested, using all related contract provisions including thresholds, independent amounts, and rounding amounts. Calculation of interest due or payable on collateral is also supported.
Find out more about how ROME may benefit your organization.
Contact us at info@romecorp.com. |
