1. How time-consuming do you find the changes to systems, processes and documentation in non-cleared derivatives?
Not directly relevant to me as we are an agent. Given what we do for clients, we haven't had to change that much tech in order to accommodate the ongoing requirements for non-cleared derivatives.
2. On the short-term scale, what would be the worst scenario caused by inconsistency between the various sets of rules?
That clients can’t book any more deals and the industry finds something else to do that gives near to the same result. Or, the business dries up completely.
3. In your opinion, what is the most optimal way of keeping pace with regulations and requirements?
A combination of attending events such as this and engaging with trusted partners – service providers.
4. To what extent should a bank analyse the potential of a collateral change?
It’s something that the larger firms monitor regularly. They will look at their allocation ladder over months and control what has to be financed, booked and borrowed.
5. Last year, in a panel discussion organised by Risk.net, you said there was enough collateral, but it was all locked up in the grand scheme of things. How are the banks and insurance companies doing now and how have they progressed with its unlocking?
It’s moving slowly. While the market is aware of the new ideas and opportunities, it has yet to really open the taps and begin transforming collateral to meet future demands and take hold of that opportunity.
6. Can you predict the behaviour and development of the banking market with regard to having a good grasp of collateral management in the upcoming year or two?
That’s a tough one. I think it pays to be flexible and remain aware of all the options and market developments. There are many and at least some of them will become reality one day.
Read also about Mark's standpoint on EMIR in the whitepaper EMIR Update: Helping Clients Manage a Creeping Implementation Timetable