Insurance Risk’s third collateral management survey in conjunction with BNY Mellon reveals how insurers are grappling with the challenge of central clearing for over-the-counter derivatives.
Brought into effect by parts of the Dodd-Frank legislation in the United States and by the European Market Infrastructure Regulation (EMIR) in Europe, the new regime promises a fundamental readjustment of practice in the area of collateral management. Now, for most trades, firms will clear through a central counterparty and will have to post both initial and variation margin, with the former being cash or sovereign bonds and the latter cash only.
The survey, conducted by Insurance Risk magazine, found that:
One-hundred and eleven insurers participated in the survey, representing a sample with more than $9.88 trillion of assets, compared with $7.45 trillion last year.
To learn more, download the Collateral Management Survey 2014.
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may be used as a generic term to reference the corporation as a whole and/or its various subsidiaries generally. Products and services may be provided under various brand names in various countries by duly authorised and regulated subsidiaries, affiliates, and joint ventures of The Bank of New York Mellon Corporation, and may include The Bank of New York Mellon, One Wall Street, New York, New York 10286, a banking corporation organized pursuant to the laws of the State of New York, and operating in England through its branch at One Canada Square, London E14 5AL, England and registered in England and Wales with numbers FC005522 and BR000818. The Bank of New York Mellon is supervised and regulated by the New York State Department of Financial Services and the US Federal Reserve and authorised by the UK Prudential Regulation Authority. The Bank of New York Mellon, London Branch is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. The Bank of New York Mellon SA/NV is authorised and regulated by the National Bank of Belgium (“NBB”) as a credit institution and by the Belgian Financial Services and Markets Authority (“FSMA”). The Bank of New York Mellon SA/NV, London Branch is authorised by the NBB and the FSMA and subject to limited regulation by the UK Financial Conduct Authority and the UK Prudential Regulation Authority. Details about the extent of our regulation by the UK Financial Conduct Authority and UK Prudential Regulation Authority are available from us on request. If this material is issued or distributed in Japan, it is issued or distributed by The Bank of New York Mellon Securities Company Japan Ltd. as intermediary for The Bank of New York Mellon. Not all products and services are offered in all countries.
This material, which may be considered advertising, is for general information purposes only and is not intended to provide or be construed as legal, tax, accounting, investment, financial or other professional advice on any matter. If distributed in the UK or EMEA, this material is a financial promotion. This material, including the statements contained herein, is not and should not be construed as an offer or solicitation to buy or sell any of the products (including financial products) or services mentioned or to participate in any particular strategy. This material, including the statements contained herein, is not intended and shall not be construed to constitute a recommendation by The Bank of New York Mellon Corporation, its subsidiaries, affiliates, and/or joint ventures to undertake or refrain from undertaking a particular action or course of action or a recommendation that is particularized to any recipient’s specific needs, objectives or circumstances, and the recipient hereof should discuss this information and material with such internal or external advisors that the recipient hereof deems appropriate before acting in any manner on such information or material. Neither The Bank of New York Mellon Corporation, its subsidiaries, affiliates, and/or joint ventures nor any of their respective officers, employees or agents are, by virtue of providing any of the materials or information contained herein, acting as an adviser to any recipient (including a “municipal advisor” within the meaning of Section 15B of the Securities Exchange Act of 1934, as amended, “Section 15B”), do not owe a fiduciary duty to the recipient hereof pursuant to Section 15B or otherwise, and are acting only for their own interests.
This material is not intended for distribution to, or use by, any person or entity in any jurisdiction or country in which such distribution or use would be contrary to local law or regulation. Similarly, this material may not be distributed or used for the purpose of offers or solicitations in any jurisdiction or in any circumstances in which such offers or solicitations are unlawful or not authorised, or where there would be, by virtue of such distribution, new or additional registration requirements. Persons into whose possession this material comes are required to inform themselves about, and to observe any restrictions that apply to, the distribution of this material in their jurisdiction. The information contained in this material is for use by wholesale/professional clients only and is not to be relied upon by retail clients. Any discussion of tax matters contained in this material is not intended to be used, and cannot be used, for the purpose of avoiding tax or penalties under any applicable law or regulation or promoting, marketing or recommending to another party any transaction or matter. BNY Mellon does not guarantee the accuracy of any information contained herein and cannot be held liable for any errors in or reliance upon this information. Prior results do not guarantee a similar outcome. The financial products (other than deposit products) mentioned are not insured or protected by any government, state or federal agency (including the Federal Deposit Insurance Corporation), are not deposits of or guaranteed by BNY Mellon or any bank or non-bank subsidiary thereof, and are subject to investment risk, including the loss of principal amount invested.
Your ability to utilize the global collateral services described herein is subject to a wide variety of applicable regulations and to the oversight of relevant regulators in different countries and/or jurisdictions. You should take your own independent professional advice (including financial, tax and legal advice) before agreeing to use any of the services referenced in this material.
All references to dollars are in US dollars unless specified otherwise.
This material may not be reproduced or disseminated in any form without the express prior written permission of BNY Mellon. Trademarks, service marks, logos and other intellectual property marks belong to their respective owners.
© 2014 The Bank of New York Mellon Corporation. All rights reserved.