The Collateral Management Operations processes the Net Present Value of the portfolio of trades between BNP Paribas and its counterparties on a daily (or as specified) basis and ensure that this exposure is sufficiently collateralised.
Currently the group handles approximately $90 Billion of collateral globally on behalf of the Bank and its counterparties as regulators to require Banks to mitigate counterparty credit risk.
The group interacts closely with Traders, Marketers, Legal, Credit and Operations. The collateralised portfolios consist of practically all products traded within BNPP Capital Markets, including OTC Fixed Income and Equity Derivatives, Swaps, Repos, FX, Credit Derivatives, FRA’s, CAPs, Swaptions Commodities and Exotics.
The process requires comparison of exposures with the value of the assets pledged, in accordance with the parameters specified in the legal agreement.
Changes in the portfolio PV (due to market price fluctuations, or new / matured trades) will generate changes in the required collateral balance.
The collateral teams will call for or post additional collateral funds depending on the direction of movement of the PV of the trade portfolio relative to collateral pledged.
This daily margin call process ensures that at all times, the Bank and the counterparties remain as protected as possible from excessive credit risk exposure, and hence can minimise the amount of regulatory capital set aside against credit risk.
ROLES AND RESPONSIBILITIES
The will be responsible for the full front to back daily margin call process for specific clients :