Source: BNY Mellon
BNY Mellon, the global leader in investment management and investment services, has formed Global Collateral Services to serve broker-dealers and institutional investors facing rapidly expanding collateral management needs as a result of current and emerging regulatory and market requirements.
Global Collateral Services brings together BNY Mellon's global capabilities in segregating, allocating, financing and transforming collateral on behalf of clients, including its market leading broker-dealer collateral management, securities lending, collateral financing, liquidity and derivatives services teams. Global Collateral Services will be led by Kurt Woetzel, senior executive vice president and head of Global Operations and Technology.
"Global regulations and changing market dynamics are mandating new and complex requirements for the use of collateral, which are forcing both sell-side and buy-side firms to reevaluate their need for and use of collateral," said Gerald L. Hassell, chairman, president and chief executive officer. "We have a compelling opportunity to build on our industry leading position in this space given the clear and growing client requirements for secure, efficient and reliable collateral services."
BNY Mellon is distinctively positioned to help clients in the current economic environment as one of the largest servicers and managers of financial assets globally. BNY Mellon is the world's largest global custodian and operates one of the industry's largest securities lending programs, with $3 trillion in lendable assets. In addition, the company operates a proprietary global collateral management technology platform designed to efficiently handle all asset types denominated in any currency. The platform processes a wide array of transaction types, including derivatives, tri-party repurchase agreements, portfolio swaps, and collateralized loans, as well as a wide variety of margin management activities.
"Global Collateral Services addresses the growing need for our clients to manage their counterparty and market risk through the full range of innovative collateral management solutions we offer," said Woetzel. "This move will accelerate our ongoing product development in an area where we already enjoy a significant competitive aitive advantage."
Following the financial crisis, regulators globally have been mandating additional requirements for collateral in order to reduce the risk of negative systemic events from impacting the market. Such regulations as Basel III and Dodd-Frank will require additional collateral deposited between trading partners, set standards on the types and amounts of collateral needed to transact business, impose collateral requirements on trades conducted through central clearinghouses, and require investors to use collateral more efficiently because of the increased demand.
"These regulatory mandates will result in an unprecedented need for and effective deployment of collateral across our entire client base, significantly increasing the demand for the collateral management services that we deliver," said Woetzel. "We will continue to work closely with clients, regulators and the industry to develop innovative solutions that address emerging needs."