FIS Enterprise Risk Ideas Portal
Ability to reserve limit availability for a specific potential deal. This would probably be designed as the ability to save a potential deal with a status of 'Limit Hold', which would generate a special 'projected/pending' limit usage type. There would need to be a strict use-by date/time or expiry, as well as an approval process, for such Limit Holds.
Hi Lichu - good point about failed settlements. I would suggest that if a counterparty fails to settle a deal, this should be reflected as a type of 'overdraft' exposure (with a rolling/open-ended maturity). For FX deals, the exposure would be the Receive/Buy Amount. For lending/money market deals, it would be the notional amount. We could configure a dedicated 'failed settlement' product in ACR to this effect. Alternatively, one could have a 'failed settlement' flag on deals, that, if set to TRUE, would modify the deal's behaviour in terms of exposure, e.g. generate 'failed settlement' exposure (new measure?) beyond the maturity of the deal. [I might raise a new "Idea" on this topic]
In conclusion I don't think failed settlements should be treated as deal reservations. A deal reservation is just blocking a certain amount of limit availability for a *potential* deal, which may or may not eventuate as true exposure. Whereas a failed settlement represents real exposure which should be reflected as such in the system.
Good idea, we have also a regulatory request when a deal failed on settlement, this deal should create exposure/set limit on hold. deal reservations is a potential idea.