INTRODUCTION
From the desk of Brian Traquair
Brian Traquair, President:
SunGard Capital Markets & Investment Banking
Securities lending has traditionally been perceived by the Federal Reserve and other industry regulators as a business with measured risks due to its collateralized nature. However, with the range of investments spanning from conservative to risky, what you invest in and how you measure risk does indeed matter.
Recent headlines in the press have made this point clear. The enormous value of write-downs tied to the subprime-mortgage collapse, the rise in concentration and liquidity risk, the lack of transparency in off-balance sheet portfolios and overconfidence in certain market sectors are catching up with many large financial institutions.
In the securities finance industry, trade and risk management technology is taking centre stage, as firms' requirements change significantly as a result of current market volatility. The ability to monetise collateral is now more difficult, as there is more focus on potential liquidation costs of collateral pools.
Financial institutions need to have a clear and comprehensive picture of risk across the enterprise as well as within business lines. Industry participants must have systems that are flexible and can quickly adapt to the changing market.
While SunGard's securities finance solutions are designed to book and manage collateral, proven and popular solutions for risk management, such as SunGard's Adaptiv, have the potential to help customers manage the market risk associated with their collateral positions. We are evaluating a variety of options for providing our customers with integrated risk functionality, and will keep you posted as we progress.
Loanet automates many of the processes that would otherwise take a great deal of staff time and effort; the level of automation produces a seamless day to day operation for many firms. Loanet is continuing to grow and provide added value services to its current suite of offerings both in the U.S. and on the global stage. These new services include Street-Wide Contract Consolidation, Short Rebate Allocation and expanded LCOR International services, as well as a new Fully Paid Lending initiative-all of which you can read about in this edition.
We also present a number of updates on WorldLend, Martini and Global One, and the latest happenings on the ALD front in Europe. In addition, Astec provides the latest securities lending indicators for equities and fixed income borrow activity.
As always, I welcome any of your comments and suggestions, so please do not hesitate to contact me at +1 416 646 5895 or brian.traquair@sungard.com.
Thank you for your business and your continued support of SunGard solutions!
Kind Regards,
Brian Traquair