Bleeding Oil: Securities Finance Industry Analysis

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By Chris Benedict, Director, DataLend. Lower oil prices due to a glut of supply and a strong dollar are an early Christmas gift to consumers but a big lump of coal to shareholders of many energy companies. Oil has dropped by a whopping 35% from its June highs of $102 per barrel, and the stock prices of many energy companies have followed suit. The worst hit were the shale oil firms, offshore drillers and oil companies with high debt-to-equity ratios. As the longs sold, the shorts pounced on the opportunity and the share prices of some companies dropped to five-year lows. Unsurprisingly, utilization and fees to borrow have spiked in these names as their share prices tanked. In this article we’ll take a look at some companies that have been the worst hit and are among the most actively traded in the securities finance market.

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DataLend: Securities lending top 10 earning equities

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Securities lending top 10 earnings equities – November 25, 2014. DataLend presents its top 10 earnings equities for November 25, 2014. This list is built on DataLend’s universe of more than 42,000 securities on loan.

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The Fed’s Tarullo: beefing up liquidity regulation wherever liquidity emerges

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Federal Reserve Governor Daniel Tarullo gave a speech last week on liquidity regulation at The Clearing House 2014 Annual Conference. He laid out some pretty big themes, including the value of regulation, why Lenders of Last Resort (LOLR) matter and why the Federal Reserve was created to begin with. He also talked about recent actions in strengthening liquidity regulation in the financial system. His conclusions were that regulators are preparing to be broad-sweeping in their capture and regulation of financial market liquidity wherever it may occur.

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The FSB on securities finance data collection and aggregation: a good start but there are some tough points to resolve

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The Financial Stability Board has released a consultative document, “Standards and Processes for Global Securities Financing Data Collection and Aggregation.” Most of this is no surprise and the actual data elements were expected, but there are some twists and turns in the road to good results. We highlight the issues most likely to cause trouble for both market participants and regulators.

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Finadium report: Transforming the Agency Lending Business Model

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A new report from Finadium takes a fresh look at the securities lending agent business model and finds three scenarios for future evolution. Agent lenders for beneficial owners, including pension plans and fund complexes, have built robust businesses based on their deep experience in the financing markets and relationships with counterparties. A regulatory, technological and operational infrastructure now exists around agency lending that was hard to image twenty years ago. Even so, securities lending is in the middle of substantial change. In order to remain successful franchises, agent lenders must evolve to meet market demands. Financial markets are built on innovation and agency securities lending is no exception.

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