The way that collateral is being used, and indeed needed, in financial markets has altered significantly since the financial crises. With the central role handed to CCPs in markets, the majority of trades now need to be collateralised in one way or another.
This is, in turn, effecting the way that sovereign wealth funds interact with the market. As large scale holders of high quality liquid assets (HQLA), there is a new opportunity for such funds in the post-crises landscape.
We spoke to Jeannine Lehman, managing director of BNY Mellon Markets, about the challenges and opportunities facing sovereign wealth funds and how they can become collateral providers in the new environment.
BNY Mellon, in association with the Official Monetary and Financial Institutions Forum released a paper on the subject, which you can view here: Crossing the Collateral Rubicon