Call for Proposals
The SWIFT Institute invites proposals for research on the increasing and changing collateral requirements due to new rules and regulations.
Increasing and Changing Collateral Requirements Due to New Rules and Regulations
Collateral and collateral management are increasingly important in financial markets. New rules and regulations for example from Dodd-Frank, EMIR and Basel III are mandating central clearing for a wider range of products and creating demand for higher levels of collateral. This requires firms to manage collateral in a more efficient way and may require changes in business models. Furthermore collateral eligibility standards will change resulting in an increased demand for and reduced supply of high-grade collateral and broadening the range of collateral used. According to ISDA approximately 80% of exchanged collateral is currently in "cash" and mainly in Euros and US dollars; however, going forward there will be increasing demand for "non-cash" collateral. What is the impact of these changes on financial institutions?
TOPICS: Research proposals on the impact of these restrictions can be theoretical or empirical, and should look at implications for banks vs. other market participants (e.g. insurers; pension funds; etc.). The focus of the research could look at the following (other suggestions are welcome)
- The cost of increasing collateral requirements to the financial industry
- Whether there will be a "shortage" of collateral and what its consequences will be
- The operational impact of increasing collateral requirements
- The cost/impact of the broadening of collateral asset classes
- The risks and impact of a reduction in supply of high-grade collateral
- The impact on trading patterns of more costly post-trade requirements
- The impact on risk in the financial sector by the increase in collateral requirements
- The likely effect of these regulations on the price volatility of high-grade collateral
GRANT & WORKING PAPER: A grant of EUR 15,000 will be awarded to the author of the selected proposal. 50% will be paid immediately; the remaining 50% will be paid on submission of a working paper following the research.
PAPER SUBMISSION PROCEDURE: Please submit your research proposal as follows:
1. CV/bio including education, work history, research experience, publications, etc.
2. Description of your research project (2,500 words maximum) to include the following:
- Objective of your research
- Methods by which you intend to undertake your research
- Timeframe by which you intend to complete your research
3. By email in MS Word/Excel/PowerPoint format, and/or pdf
Deadline: Proposals must be submitted no later than 24 September, 2012
Email: Send submissions to: Information.SWIFT.Institute@swift.com