Northern Trust Launches Enhanced Collateral Optimization Solution
July 12 2018 - 7:50AM
Business Wire
Latest Capabilities May Enable Asset Owners and
Asset Managers to Reduce Cost, Mitigate Risk and Actively Manage
Liquidity
Northern Trust (Nasdaq: NTRS) has developed an enhanced
collateral optimization solution designed to help institutional
investors manage their collateral more efficiently whilst meeting
the demands of continuing global regulatory reform.
“Our clients want to be strategic and nimble in managing their
investment portfolios, especially with regard to collateral
management – deploying the right assets at the correct time to meet
regulatory requirements whilst minimizing any impact on investment
performance,” said Pete Cherecwich, president of Corporate &
Institutional Services at Northern Trust. “Historically the
collateral management process took time, resource and frankly a lot
of spreadsheets. Today our advanced algorithmic optimization
solutions can achieve this objective – minimizing the value of
assets that need to be tied up as collateral and reducing
counterparty exposure.”
Northern Trust’s collateral optimization capability applies
flexible algorithms to manage asset selection when meeting margin
requirements. The use of these algorithms could reduce the market
value of assets being delivered or prevent assets from being tied
up as collateral if they can be deployed better elsewhere. There
are a number of different drivers that can be customized to the
priorities of each client from a liquidity management
perspective.
“The ability to optimize the deployment of collateral is key to
reducing our clients’ counterparty risk by utilizing the most
efficient assets,” said Gavin Platman, head of operations strategy
at Insight Investment. “Insight Investment and Northern Trust have
worked together and have devised a solution that we believe
addresses our clients’ needs today and provides flexibility for the
future as liquidity and collateral management needs evolve.”
In addition to its new collateral optimization capability,
Northern Trust recently became the first global custodian to offer
access to buy-side, sponsored repo clearing via LCH RepoClear. This
capability helps clients minimize risk whilst improving
profitability, enabling them to access a diverse range of lenders
in a more efficient manner.
Northern Trust can now also support clients trading triparty
repo via Euroclear’s triparty service. This provides
diversification of repo counterparties as the industry moves away
from traditional banking counterparties.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider
of wealth management, asset servicing, asset management and banking
to corporations, institutions, affluent families and individuals.
Founded in Chicago in 1889, Northern Trust has offices in the
United States in 19 states and Washington, D.C., and 23
international locations in Canada, Europe, the Middle East and the
Asia-Pacific region. As of March 31, 2018, Northern Trust had
assets under custody/administration of US$10.8 trillion, and assets
under management of US$1.2 trillion. For more than 125 years,
Northern Trust has earned distinction as an industry leader for
exceptional service, financial expertise, integrity and innovation.
Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle
Street, Chicago, Illinois 60603 U.S.A., incorporated with limited
liability in the U.S. Global legal and regulatory information can
be found at https://www.northerntrust.com/disclosures.
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version on businesswire.com: https://www.businesswire.com/news/home/20180712005399/en/
Europe, Middle East, Africa &
Asia-Pacific Contacts:Camilla Greene+44 (0) 207 982
2176Camilla_Greene@ntrs.comorMat Barling+44 (0) 207 982
1445Mat_Barling@ntrs.comorUS & Canada Contact:John O’Connell+1
312 444 2388John.OConnell@ntrs.com
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