J.P. Morgan Collateral Management offers automated use of gold

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First tri-party agent to accept gold

J.P. Morgan today announced it is the only tri-party collateral manager to accept physical gold as collateral to satisfy securities lending and repo obligations with counterparties. This comes as more clients look to use gold as a hedge against inflation and to post as collateral. 

“The ability to finance and leverage the broadest range of asset classes is important to our clients. Many clients are holding gold on their balance sheets as an inflation hedge and are looking to make these assets work for them as collateral,” said John Rivett, Collateral Management Executive, J.P. Morgan Worldwide Securities Services. “By combining our collateral management and vaulting capabilities, we provide clients with greater flexibility in how they mobilise collateral.”

The automated use of gold in collateral management is introduced under J.P. Morgan’s Worldwide Securities Services global collateral engine initiative.  This initiative enables clients to mobilize collateral inventories across multiple geographies and trading activities, regardless of the underlying obligation, to extract maximum value and manage risk.

The firm expects to accept additional precious metals and commodities as collateral later in the year.

J.P. Morgan Worldwide Securities Services Australia is in discussions with clients on how the product might be evolved to suit local investor demand and needs.

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