June 18, 2020 - On June 16th, in the second webinar of our Ops Series, Ellen Hefferan moderated a lively panel of operations professionals who shared experiences meeting equipment, internet capacity and security requirements for a remote workforce. The one outlier – the Letter of Credit business – actually requires a procedural footprint in the office to handle physical mail, collateral and signatures. This perhaps is one area that is not ready for the “new normal”.

Our panelists described ways to recruit, onboard and train new people remotely.  While there is nothing like pulling up a chair and shadowing someone, a more structured training approach through reading and screen sharing does seem to be effective. All agreed that greater visibility to staff has been obtained through shorter daily touchpoints, online meetings and the development of better workflow tools.  

With high market volatility due to Covid-19, retail outflows and compliance triggers on CLOs, trade volumes spiked in March.  Agents settled trades while handling the increased borrowing activity under revolving credit lines. It was evident that maintaining settlement liquidity was a very high priority for operations teams as the median settlement time in March decreased to 9 business days.  However, the median settlement times rebounded to 13 in April and 14 in May.    

Josh Herrera (MS) noted that the lack of scalability or human sustainability is a wake-up call to leadership. Julia Kingsbury (CS) agreed that firms need the tools to support them at times of high volume and that this time is a call to arms to automate and not rely on human intervention.   Bernadette Conway (Elmwood Asset Mgmt) stated that data must be delivered in standard formats, easily consumable with the ability to produce better metrics.   Mark Maragni (MUFG) reiterated the need for standardization and scalability with pipes built to automate the notifications which today are still sent via email. Having listened to his fellow panelists, Charles Wambua (AFS) indicated that the COVID crisis has forced banking institutions and the vendor community to really look at workloads and workflows and collaborate. In his view, platforms need to be able to integrate through APIs to manage the loan life cycle in one big ecosystem.   This would allow all systems to publish to and consume from the ecosystem, the details pertaining to deals and transactions, avoiding the re-keying of data. No doubt, this would require standardization and the support of management, but if implemented would actually result in a stronger, more efficient loan market.

Panelists noted that hours formerly spent commuting, as well as time after dinner and weekends, find people now logged onto their computers.  All recognized the importance of taking vacations, which their firms are advocating.   Also, take a walk each day. And if you think you may want some company on that walk, then adopt a puppy – like Bernadette Conway!  Don’t Stress!  Get Ready for Distressed! will be our next topic. Join us on Tuesday at 4PM (ET) as subject matter experts provide their insights on distressed trading and settlement

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LSTA Newsletter: July 10, 2020

This week we cover: Lee Shaiman continues our examination of CLOs and (de minimus) systemic risk,Ted Basta drills into secondary loan market performance, Meredith Coffey…