Credit Suisse Report Names Technologies Trends Changing Banking
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These assets are in heightened demand due to the implementation of bank regulations for liquidity, mandatory clearing and margin requirements for OTC derivatives. The securities lending market has long played an important role in high quality liquid assets portfolio management. However, incumbent operational bottlenecks across a fragmented global securities settlement system impede collateral fluidity, increase costs and risks, and result in sub-optimal financial resource management.
In Europe alone, there exist over 40 central securities depositories CSD. Addressing these issues, HQLA X will help market participants redistribute collateral liquidity more efficiently, by improving interoperability for pools of securities residing in multiple, disparate settlement systems and locations. We look forward to further collaboration with the broader community of collateral agents and custodians.
It was built from the ground up to enable businesses in complex and often highly regulated markets to overcome real-world challenges like this those associated with securities lending.
It organises markets characterised by integrity, transparency and safety for investors who invest capital and for companies that raise capital — markets on which professional traders buy and sell equities, derivatives and other financial instruments according to clear rules and under strict supervision. HQLA X is a financial technology innovation firm that specializes in delivering liquidity management and collateral management solutions for institutional clients in the global securities lending and repo markets.
Learn more at www. R3 is an enterprise software firm working with a network of over banks, financial institutions, regulators, trade associations, professional services firms and technology blockchain credit suisse pdf to develop on Corda, its blockchain platform designed specifically for businesses.
Corda is the outcome of over two years of intense research and development by R3 and its members and meets the highest standards of the banking industry, yet is applicable to any commercial scenario. Further information can be found at www. Further information about Credit Suisse can be found at www. For more information visit www. After breakthrough proofs of concept in the spring, two large projects are now quietly moving forward into pilot production that could see blockchain technology transform wholesale markets at the core of the global financial system.
The syndicated loan market remains a crucial source of funding to many companies, while higher capital regulations have reduced banks blockchain credit suisse pdf to provide loans. The success of this proof of concept has now raised the prospect of three-day settlement bringing many new investors into what has hitherto been regulated as a less-liquid asset class that has traditionally operated on to day settlement times.
Emmanuel Aidoo, Credit Suisse Emmanuel Aidoo, head of the distributed ledger and blockchain effort at Credit Blockchain credit suisse pdf, approached many of those 19 participants to discuss various pain points in blockchain credit suisse pdf trading over the 12 months leading up to the proof of concept. He gives Euromoney the latest update, saying: To work, any such platform will need many blockchain credit suisse pdf and buy-side participants.
With the distributed ledger technology now proven, most effort is now being devoted to the funding and governance of a network that will eventually compete with Markit and Loan IQ, which dominate US loan secondary trading and servicing today.
Agent banks exert a lot of control in the secondary loan market over where assets trade, where the associated data sits and how customers receive it. And when two organizations trade a loan, they can choose between them where it settles. Savings might come from reduced trade reconciliation cost through the use of a golden source of books and records, lower fees paid to third-party servicers and elimination of associated jobs handling settlement.
More intriguingly, a three-day settlement window in syndicated loans would reduce the difference between loans and bonds. For more articles like this, follow us euromoney on Twitter. But for banks, it can be costly to have too much cash sitting around doing nothing.
Having too little liquidity can run them afoul with regulators, of course. They are building a distributed ledger specifically for banks to trade highly liquid securities with one another and thus be better able to manage their liquidity ratios. In a recent reportthe Bank of International Settlements found that financial institutions hold more highly liquid assets to meet short-term obligations than they need to. This puts an onus on the CFO and treasury department of each bank to blockchain credit suisse pdf their liquidity ratios to a target, he blockchain credit suisse pdf.
Stroemer said he believes that rather than physically transfer cash and securities among one another, banks would be better off keeping all the securities in a secure place, and transferring legal title to them amongst each other.
The ledger will not store the cash or securities — the trusted third parties will take care of that. The project demonstrated the ability to create a digital collateral receipt lending market, designed to achieve the following benefits:. As part of the flight path from laboratory to production, R3 and HQLA x will engage the regulatory community to showcase the prototype and receive feedback for shaping the production ready platform.
Rutter, CEO of R3, commented: As a blockchain credit suisse pdf, there is a heightened need for a marketplace that facilitates large scale, cost efficient collateral transfers blockchain credit suisse pdf the global financial ecosystem, and Corda exceeded the most demanding requirements.
This project is an excellent example of the R3 business model of testing use cases in its Lab and Research Centre in preparation for production ready deployment.
We look forward to taking this concept into the pilot and developing this innovative idea further. Thereby it allows us to enhance our integrated financial resource management by linking an HQLA exchange to the overall liquidity management of Commerzbank.
This ultimately helps to mitigate systemic risk by enabling orderly default unwinds. This solution could provide bank treasurers with a new supply of non-cash collateral and offer more cost efficiency by optimizing balance sheet usage and liquidity management. Operating in New York, London and Singapore, the R3 team is made up of financial industry veterans, technologists, and new tech entrepreneurs, bringing together expertise from electronic financial markets, cryptography and digital currencies.
The R3 Lab and Research Centre has quickly become a centre of gravity for collaborative research and testing of distributed and shared-ledger inspired technologies, and is where R3 works with its partners to define, design and deliver the next generation of financial infrastructure. HQLA Xa partnership of financial market veterans and R3, is a financial innovation firm that specializes in providing financial resource management solutions to market participants.
Project Bravo press release. Link to Financial Times Article subscription needed. Tim brings to the team an outstanding background in business development within the banking community. Olly is an Investment Banking veteran having spent over two decades at Goldman Sachs. Initially hired into a graduate program, Olly spent 5 years in the Corporate Treasury in London before transferring to Blockchain credit suisse pdf Kong to become the Regional Treasurer for non-Japan Asia from to He transferred back to London to manage the Global Funding business including Money Market trading and continued to run blockchain credit suisse pdf business profitably and through the financial crisis.
Olly assumed responsibility for the Global Repo Business and International Short Term Interest Rate trading in working closely with clients, regulators, governments and blockchain credit suisse pdf authorities to help shape the new trading and balance sheet landscape.
Since leaving Goldman Sachs he has been spending time with some exciting Financial Technology start-ups. Guido is a financial market veteran with over 26 years of professional work experience in a variety of trading, risk management and senior leadership positions.
In his most recent role as global head of repo trading at UBS, he managed a global team that was responsible for firm wide secured funding activities for fixed income securities. In this role, and in response to blockchain credit suisse pdf changing regulatory landscape related to Basel III capital and liquidity requirements, Guido led an innovative organizational restructuring to integrate the repo business into a centralized treasury function to enhance proactive financial resource management for the bank.
HQLA X HQLA X is a financial technology innovation firm that specializes in delivering liquidity management and collateral management solutions blockchain credit suisse pdf institutional clients in the global securities lending and repo markets. R3 R3 is an enterprise software firm working with a network of over blockchain credit suisse pdf, financial institutions, regulators, trade associations, professional services firms and technology blockchain credit suisse pdf to develop on Corda, its blockchain platform designed specifically for businesses.
Peter Lee Published on: Monday, August 21, After breakthrough proofs of concept in the spring, two large projects are now quietly moving forward into pilot production that could see blockchain technology transform wholesale markets at the core of the global financial system. The project demonstrated the ability to create blockchain credit suisse pdf digital collateral receipt lending market, designed to achieve the following benefits: