Pioneering Solution â Collateral Management - Clearstream
Pioneering Solution â Collateral Management - Clearstream
Pioneering Solution â Collateral Management - Clearstream
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Use of collateral – comparing Brazil to other markets<br />
Growth in collateralised exposures<br />
(As percent of total exposure)<br />
Source: ISDA , CETIP, Brazilian market interviews<br />
% of derivatives collateralised provides<br />
evidence of the extent to which market<br />
participants use collateral to manage<br />
their counterparty exposures<br />
Globally, there is evidence of increases<br />
in collateral use for most risks: OTC<br />
derivative coverage has increased to<br />
68% of credit exposure in 2008 from<br />
29% in 2003<br />
In Brazil, the level of collateralisation<br />
remained very low in 2010<br />
Most contracts are ‘clean’ and<br />
not collateralised at all<br />
When exposures become too<br />
large banks try to ‘reset’<br />
contracts<br />
The gap between Brazil and other<br />
markets is indicative of the potential for<br />
increased use of collateral in OTC<br />
markets<br />
OTC Derivatives – Quo vadis<br />
23
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