Credit Risk - Lexington partners with Allustra in Collateral Management

 

The last decade has amply demonstrated the growing size and frequency of financial crises, from the economic problems of Asia and Russia, to the failure of Long Term Capital Management and more recently, WorldCom and Enron.

Collateralisation is now a key component of the global interbank market, protecting against potential losses from similar situations by mitigating counterparty risk. Reduction of regulatory capital requirements, more competitive pricing of credit risk and improved access to market liquidity continue to be important additional drivers.

According to ISDA, technology requirements are increasing in cost and complexity as the extent of collateral in use grows globally. Spreadsheets offer limited capabilities and custom built systems are too costly and time consuming for most participants to consider. The vendor market is sparsely represented, largely through systems designed to meet specific tactical needs. There has been a gap in the market for a scalable, strategic technology solution which can grow with an organisation's need towards the ultimate goal of "enterprise collateral management". Lexington and Allustra Limited are now working together to ensure that this gap is being filled.

The cornerstones of a solution which can meet these needs are to establish:

  • A firm-wide inventory management capability
  • A firm-wide platform for by-product collateral management
  • A technical architecture and systems design providing performance, flexibility, scalability and ease of integration.

Allustra has developed a highly flexible and configurable product suite encompassing components which meet these needs, built upon experience and industry proven implementations.

Lexington complements this with a full range of technical, integration, project management and risk management consulting services to ensure that the needs of any client organisation will be met.

Also see:

Regulatory Change

Regulatory Documentation Portal - The RDP

MiFID Solutions

Operational Risk Management & Compliance

 

© Lexington Systems Limited 2006