September 2008

CUSTODY 2008: BoISS View from the Top

baker.jpgStephen Baker

head of custody services

Bank of Ireland Securities Services

 

I think the challenges of the last six months are likely to influence the challenges for at least the next six months and possibly the next year. One of the challenges for any custodian is to manage its own risk, particularly operational risk, but also counterparty and credit risk.

 

As a result of the credit crunch, managing credit and counterparty risk has become paramount. Organisations need to be very conscious of the risks they are running and how best to minimise those risks.

 

The coming year is also going to be a challenge for many custodians in managing the relationship between income and cost. As stock market values suffer this has a negative impact on custodians’ income. Therefore cost containment to minimise the negative effects of falling income levels will be paramount.