Collateral Management in BookRunner
By Eric Carriere, Business Analyst, RiskAdvisory
Credit risk management is a major concern for any company because of the large potential losses which can result in the case of default. A common way to mitigate credit risk is by requiring that your counterparty post collateral in the form of some highly liquid asset. A caveat of this is that sometimes the collateral itself has market risk which needs to be accounted for as well.
RiskAdvisory took on this challenge to provide functionality within our BookRunner solution to capture this aspect of the business. The Collateral Management Module in Bookrunner allows companies to accurately capture collateral asset valuation and use it to offset credit exposure.
An additional component within the Collateral module is the ability to compensate for volatility in the collateralized asset through our Haircut Management form. The haircut will reduce the margin value of the asset and therefore the credit risk for the company will not be underestimated.
This new functionality flows through the system to the Credit Risk Report allowing risk managers to make decisions with the most accurate information. To learn more about the Collateral Management Module, please contact support@riskadvisory.com or call (403) 263-7475.