Collateral security portfolio as an object of financial management

Bilous Kostiantyn
Ph.D. student, Odessa National Economic University, Odessa, Ukraine e-mail: : kbilous@kse.org.ua, ORCID ID: http://orcid.org/0000-0002-2891-3640

Cite this article:

Bilous K. Collateral security portfolio as an object of financial management. Scientific Bulletin of the Odessa National Economic University. 2021. № 1-2 (278-279). pp. 19-23.

Abstract

The article defines the concept of a collateral portfolio as an object of financial management. The author compares the use of definitions of the collateral portfolio by domestic researchers and analyzes the experience of foreign economics and market practices. In the article, the author identified factors that require their inclusion in the definition of the collateral portfolio in terms of collateral management. The following factors are included: - the collateral is not only a component of the secured loan agreement but also a component of any agreement that requires pledged collateral; - the formation of collateral can be not only a logical consequence of establishing collateral credit relations but reversely can be the first step for their creation; - the collateral portfolio is a set of collaterals of all multi-directional simultaneous agreements with different counterparties and/or tri-parties; - the possibility of rehypothecation of the components of the collateral portfolio, allows using the pledgor’s pledged collateral securities for delivering further pledges as collaterals by the secured party to an another secured counterparty; - collateral management is active financial management due to continuous fluctuations of its collateral securities values due to price volatility in the stock markets. As a result, a definition of a collateral portfolio was formed to serve as an object of financial management. Thus, the «collateral portfolio» was proposed to name a dynamic portfolio, which is a set of rights to seize borrower’s securities, excluding the delivered pledged securities as collateral to other counterparties by rehypothecation (re-pledging) procedure. The particular study creates a basis for further investigation in the field of collateral management as a particular sphere of financial management. Finally, it is recommended to use the new definition as a basis to bring the laws and regulations of Ukraine to the standards of The European Market Infrastructure Regulation (EMIR) and The Markets in Financial Instruments Directive (MiFID) for the integration of Ukraine into the financial markets of the European Union.

Keywords

collateral, portfolio of securities, collateral portfolio, collateral management, financial management, credit, derivatives.

JEL classification: G110, G150, G210, G230, G320 DOI: 10.32680/2409-9260-2021-1-2-278-279-19-23

УДК: 336.7

References

1. 1. Білоус К.І. Еволюція формування та регуляція заставного менеджменту як окремої сфери фінансового управління. Вісник ОНУ імені І.І. Мечникова. Серія: Економіка. 2020. Вип. 25. №3(82). С. 96–103.
2. 2. Тищенко А.А. Современный аспект восприятия термина «залоговый портфель». Фи- нансовый журнал. 2019. № 4. С. 116–129.
3. 3. Радковська Н.П., Мельникова Н.А. Формування та управління заставним портфелем комерційного банку. Управлінням економічними системами. 2011. Т. 36. Вип. 12. 8 c.
4. 4. Качанова Ю.В., Бунич Г.А. Направления повышения эффективности активных опе- раций российских коммерческих банков. Ресурсам области -эффективное использование: сб. материалов межд. науч. конф., г. Королёв, 20 марта 2015 г. Королёв. С. 297–303.
5. 5. Вейсалова Х.Ш. Анализ процесса формирования залогового портфеля коммерческо- го банка. Молодая наука: сб. материалов межд. науч. конф., г. Уфа, 31 янв. 2017 г. Уфа. С. 6–10.
6. 6. Надеждина Ю.В. Совершенствование определения стоимости залогов в услови- ях развития системы оценки кредитных рисков российских банков : дис. ... канд. эк. наук: 08.00.10 / Федеральное государственное бюджетное образовательное учреждение «Финан- совый университет при Правительстве Российской Федерации». Москва, 2016. 193 с.
7. 7. Баширова C.В., Бабіна Н.В. Оптимізація використання залогів при кредитуванні. Пи- тання регіональної економіки. 2012. Т. 3, Вип. 12. C. 16–22.
8. 8. García A., Gençay R. Collateral portfolios and adverse dependence. Financial System Review. 2007. Vol. 07, No. 25. P. 87–90.
9. 9. Simmons M. Collateral management: a guide to mitigating counterparty risk (Wiley Finance) : Wiley, 2019. 752 p.
10. 10. Collateral Definition. Офіційний сайт фінансової енциклопедії Investopedia: URL: https://www.investopedia.com/terms/c/collateral.asp/ (Дата звернення 20.03.21).
11. 11. Офіційний сайт Європейського Центрального банку (ECB): URL: https://www.ecb. europa.eu/ (Дата звернення 20.03.21).