Almost half (49.5%) of conference delegates said there would
be a shortfall of eligible collateral over the next 12 to 24
months, according to a poll conducted at Clearstream and
SGX’s Global Securities Financing (GSF) Conference
Asia in Singapore.
Some 4.9% of delegates, representing pan-regional
institutions, infrastructures, investment banks, universal
banks and central banks, thought the shortfall would be
"There is plenty of collateral in the market globally, but
much of it is fragmented and so difficult to unlock and
mobilise. As a result, institutions are losing money through
inefficient collateral management," said Stefan Lepp, member of
the executive board and head of GSF at Clearstream.
The poll reflects the increasing concern of market
participants, both in Asia and globally, about a potential
shortfall of high-quality collateral in light of new rules
demanding OTC derivatives to be collateralised and traded via
To the same question in regards to a potential shortfall,
28.4% of delegates said there would be no shortfall and 17.3%
said they did not know.
While 93.4% of delegates "agreed" or "strongly agreed" that
sourcing the most appropriate collateral to cover global
exposures had become a priority, 83.8% indicated that they will
still have "much work to undertake" to move towards a more
efficient collateral management solution in their institutions.
Only 2% said they had "no more work to undertake" in this
Lepp said that a number of factors would likely lead to a
shift to more secured lending and stronger demand for
collateral management in Asia.
Over a third of delegates (37.8%) said improvement of
collateral management availability was the main influence in
Asian investors’ shift from unsecured to secured
lending. Although the largest portion (39.8%) cited the main
reason being "the local regulator adopting new rules to
encourage secured lending", while 22.4% said lower cost for
The poll explored the possibility of using
firms’ Singapore-held assets as collateral. Some
44.3% of delegates said an "efficient collateral management
solution" would be an important deciding factor for their
institution, 22.7% said "competitive pricing", 18.2% said
"trusted collateral management provider" and 14.8% said "global
The conference also revealed that tri-party repos would
become increasingly attractive to corporates as a replacement
to cash deposits, with 84.5% of the delegates agreeing that
this would be case.