Derivative charges minimisation
Post credit crunch banks explicitly charge for counterparty and funding costs on non-collateralised trades. Corporates need to do a cost benefit analysis in deciding if it is beneficial to collateralise or not the derivatives portfolio. Typical questions include:
How the corporate and bank credit ratings affect CSA negotiations?
How derivatives transacted affect the optimal threshold?
Does it make sense to assign different trades to different banks?
On multi-currency CSA facilities how to optimise collateral posted?