Cross-custody movements of inventory consume precious intraday liquidity and create settlement risks, at a significant cost to the market participant.
A fragmented custody network.
Challenging interoperability and settlement issues.
Custody movements consume costly intraday liquidity and create settlement risks.
Imprecise settlement timings limit mobility and create risk.
Settlement failures, mismatched transfers and unsynchronized deliveries.
Imprecision leads to the need to buffer positions creating significant opportunity costs.
Financial institutions manage a patchwork of custodian and counterparty relationships that currently makes collateral mobility costly and complex.
This fragmentation leads to inefficient allocations of collateral across the activity centres of a firm, excessive over collateralization in certain positions, as well as higher cost of collateral over suboptimal tenors.
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