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Securities lending industry tops $2trn on loan
13 March 2017
The lendable value has surpassed $16trn - also a DataLend record.
The securities lending industry is now a $2+ trillion
business, according to DataLend.
The New York-based data provider sent out a note on Monday,
explaining that the value of stocks and bonds on loan in
the marketplace reached more than $2 trillion recently.
That’s the highest value since DataLend began
tracking the market in 2013.
The lendable value, referring to the value of securities
lenders have made available for borrowing, surpassed $16trn -
also a DataLend record.
More than 45,000 unique securities are on loan
Speaking to Global Investor/ISF last month, BNP
Paribas' Lance Wargo, said he expected the securities
lending space to grow beyond $2 trillion in 2017.
However, he added that the winners and losers will be
distinguished by clear, well-thought-out objectives in their
securities lending programs.
"If the purpose is for incremental revenues with little to
no risk, then a limited number of borrowers and a government
securities-only cash reinvestment pool might be the best
solution," said Wargo, North American head of agency
lending at BNP Paribas Securities Services.
"If the objective is to beat a benchmark, then the lender
may seek opportunities from both general collateral and special
securities, as well as a more comprehensive reinvestment
DataLend stats show cash collateral as a percentage of
on-loan balance totelled 39.48% at the start of March (-6.39%
Non-cash collateral as a percentage of on-loan balance:
60.52% (+6.39% year-on-year)
Lenders earned $9.16 billion in securities lending revenues
in 2016, including $4.67 billion in North America; $2.64
billion in Europe; $1.67 billion in Asia-Pacific; and $182
million in the rest of the world.