Our Experts
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Ted Allen
- vice president, collateral management
- SunGard’s capital markets business
- Ted.allen@sungard.com
Ted Allen has spent nine years at SunGard and is currently vice president for collateral management in the capital markets business. He is responsible for the strategic development of SunGard’s enterprise collateral management solution suite.
Mr. Allen has devoted his career to collateral management. Over the past two decades, he has worked at technology vendors, consultancies and banks. Most recently, he established the collateral practice at CubeMatch, a specialist consultancy based in London. Prior to that, he led the development and implementation of Nomura’s enterprise-wide collateral management systems. He also worked as a manager in the collateral operations divisions of JP Morgan.
Commentary
Collateral management has traditionally been seen as a back-office activity separated from the trading area, where the focus was on risk management and control. Changes in the market infrastructure mean that revenue generation/cost reduction is becoming more important. As a result, choosing the right collateral to pledge at any point in time – based on the relative costs and eligibility schedules – is an important economic decision that is now being made in the front office. The prevailing strategies are to make the most optimal use of the assets available and to be able to apply consistent standards around the process of collateralization as a means to reduce operational risk.
The move to central clearing of OTC derivatives creates further opportunities for consolidating collateral activity. While some of the regulatory requirements are still unclear at this stage, firms are leveraging their infrastructure around listed products to provide a similar service for centrally cleared OTC products. Being able to provide a consolidated view of collateral requirements across silos and to offer ancillary services such as collateral transformation and optimization becomes a key competitive advantage.