Mariam Rafi is Global Head of Financial Resource Management and North American Head of Clearing and FXPB for Citi’s Futures, Clearing and FXPB division. In the second PAY21 show Mariam talks to Jerome Kemp, Senior Advisor to Baton Systems, about the evolution and importance of the role of collateral within the broader clearing context.

Asked about the reasons for the interest in collateral movements in recent years, Mariam comments that there has been a marked increase in the amount of collateral moving through the system as more of the market has moved to central clearing. Demand for collateral, she says, is also increasing with the non-cleared margin rules on the horizon which will impact a number of Citi’s clients in September. Added to this, the COVID volatility of spring 2020 highlighted other factors around collateral usage such as margin procyclicality of the CCPs, and increased firms’ liquidity needs.

“We have been very focused on figuring out how to use both the collateral that clients post to us, and our own liquidity resources, in the most effective manner,” Mariam says.