Dear,
In a new era of Capital Scarcity, efficient management of any form of Capital is the most critical activity.
Collateral is a form of Capital, over-collateralized assets means having non-allocated capital. The new model comes with very limited growth potential and bringing any contribution to GDP growth, reducing the capital consumption will be the priority.
Bankers will be incentived to manage efficiently any form of Capital, including collateral, by the constantly higher capital requirements and limited growth and revenues potential.
We already can see this tendency, but it will grow as we cross the systemic crisis towards the new model.
A very interesting example of this tendency is a new discipline called Collateral Mobilisation
http://www.youtube.com/watch?v=mVcgRLqBOsM
We’ll look in detail at the Collateral Mobilization and its characteristics in a future post, but today, I’d like to focus in the important role SAP Bank Analyzer must play in this critical activity of Collateral Management efficiency.
As you probably remember we’ve commented in the past that we’re in a transitionary period of the Systemic Crisis.
Since Hank Paulson’s rescue package of 2008, followed by the unconventional monetary policies of the Central Banks, Financial markets have been flooded with Massive Liquidity Injections.
http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008
http://en.wikipedia.org/wiki/Quantitative_easing
Apparently, those liquidity injections have prevented the world to fall in a Depression, maintaining some level of stability in the Capital Markets.
But some authorized voices are warning that those measures have inflated another huge bubble whose burst can bring catastrophic consequences.
http://www.huffingtonpost.com/2013/10/14/nobel-prize-bubble-housing_n_4098409.html
We’ve already mentioned here last June speech of Mr Jaime Caruana, General Manager of the Bank for International Settlements; “Making the most of borrowed time”.
https://www.bis.org/speeches/sp130623.htm
Quantitative Easing of the U.S. Federal Reserve, bond-buying programmes of the European Central Bank and the Bank of Japan have only one purpose, maintaining some level of stability in the Capital Markets, giving time to the construction of the new Financial System. In Mr. Jaime Caruana’s words, they are just borrowing time.
But those measures have also accelerated the un-sustainability of the debt bubble bringing the unconventional monetary policies close to the end.
http://www.economist.com/content/global_debt_clock
Either the end of the unconventional monetary policies bring the burst of the Capital Markets bubbles or the authorities succeed in deflating them; in both cases, we’ll see at the time how the lack of solvency in the Financial System becomes visible, drying massive amounts of liquidity from it.
On this scenario, it will be necessary enjoying a system for mobilising any form Capital in order of allocating it efficiently.
The key word is eligibility; mobilising capital (or collateral) means transporting it from where it lies to where is needed; meaning, trading collateral for cash or another underline.
But solvency also means confidence; and consequently, capital scarcity will come with lack of confidence.
In an environment of distrust, making collateral eligible for mobilisation will require proving its core value, and here comes the value proposition of Bank Analyzer, certifying and improving the eligibility of the Bank’s collateral.
Once again, Bank Analyzer is not only about providing regulatory reporting, its competitive advantage comes from its disclosure capabilities and they are going to be very valuable in the new model.
Looking forward to read your opinions.
K. Regards,
Ferran.
In a new era of Capital Scarcity, efficient management of any form of Capital is the most critical activity.
Collateral is a form of Capital, over-collateralized assets means having non-allocated capital. The new model comes with very limited growth potential and bringing any contribution to GDP growth, reducing the capital consumption will be the priority.
Bankers will be incentived to manage efficiently any form of Capital, including collateral, by the constantly higher capital requirements and limited growth and revenues potential.
We already can see this tendency, but it will grow as we cross the systemic crisis towards the new model.
A very interesting example of this tendency is a new discipline called Collateral Mobilisation
http://www.youtube.com/watch?v=mVcgRLqBOsM
We’ll look in detail at the Collateral Mobilization and its characteristics in a future post, but today, I’d like to focus in the important role SAP Bank Analyzer must play in this critical activity of Collateral Management efficiency.
As you probably remember we’ve commented in the past that we’re in a transitionary period of the Systemic Crisis.
Since Hank Paulson’s rescue package of 2008, followed by the unconventional monetary policies of the Central Banks, Financial markets have been flooded with Massive Liquidity Injections.
http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008
http://en.wikipedia.org/wiki/Quantitative_easing
Apparently, those liquidity injections have prevented the world to fall in a Depression, maintaining some level of stability in the Capital Markets.
But some authorized voices are warning that those measures have inflated another huge bubble whose burst can bring catastrophic consequences.
http://www.huffingtonpost.com/2013/10/14/nobel-prize-bubble-housing_n_4098409.html
We’ve already mentioned here last June speech of Mr Jaime Caruana, General Manager of the Bank for International Settlements; “Making the most of borrowed time”.
https://www.bis.org/speeches/sp130623.htm
Quantitative Easing of the U.S. Federal Reserve, bond-buying programmes of the European Central Bank and the Bank of Japan have only one purpose, maintaining some level of stability in the Capital Markets, giving time to the construction of the new Financial System. In Mr. Jaime Caruana’s words, they are just borrowing time.
But those measures have also accelerated the un-sustainability of the debt bubble bringing the unconventional monetary policies close to the end.
http://www.economist.com/content/global_debt_clock
Either the end of the unconventional monetary policies bring the burst of the Capital Markets bubbles or the authorities succeed in deflating them; in both cases, we’ll see at the time how the lack of solvency in the Financial System becomes visible, drying massive amounts of liquidity from it.
On this scenario, it will be necessary enjoying a system for mobilising any form Capital in order of allocating it efficiently.
The key word is eligibility; mobilising capital (or collateral) means transporting it from where it lies to where is needed; meaning, trading collateral for cash or another underline.
But solvency also means confidence; and consequently, capital scarcity will come with lack of confidence.
In an environment of distrust, making collateral eligible for mobilisation will require proving its core value, and here comes the value proposition of Bank Analyzer, certifying and improving the eligibility of the Bank’s collateral.
Once again, Bank Analyzer is not only about providing regulatory reporting, its competitive advantage comes from its disclosure capabilities and they are going to be very valuable in the new model.
Looking forward to read your opinions.
K. Regards,
Ferran.
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