During the CCP panel at the IMN Beneficial Owners Conference in San Francisco (which I moderated), there was an unspoken message: how do we break the news that eventually using CCPs may not be optional?
The Fed has published a staff report on the emergence of new banks that is sure to confound and distress some market participants. In the report, “Hybrid Intermediaries“, author Nicola Cetorelli argues that some of today’s nonbank intermediaries look very similar to earlier nonbank conglomerates that have become banks post-Lehman. BlackRock in securities lending is cited as an example. The subtext argument here is whether BlackRock and firms like it are SIFIs, should be forced to become bank holding companies, or receive some other form of bank-like regulation.
DataLend presents its top 10 earnings equities for January 19, 2015. This list is built on DataLend¹s universe of more than 42,000 securities on loan.
This article is the second in our series on securities finance-related activity in China. We cover liquidity coming from the People’s Bank of China, derivatives trading and the growth of the yuan in international financial markets.
Finadium has released a new survey report, “Institutional Investors on Sorting Out the New World of Securities Finance.” This report is the result of conversations and data collection from 99 institutional investors worldwide including pension plans and Sovereign Wealth Funds.
DataLend presents its top 10 earnings equities for January 12, 2015. This list is built on DataLend’s universe of more than 42,000 securities on loan.
China’s securities markets are beginning to open; any recent scan of the news can show the link between the Shanghai Stock Exchange and the Hong Kong Stock Exchange, a new OTC derivatives clearing platform at the Shanghai Clearing House and continued excitement about international access to Chinese issues. In this series, Securities Finance Monitor will explore the evolution of China’s markets with a focus on securities finance and collateral.
Finadium has released a new report in our Finadium for Investors series, “Perspectives on Direct Borrowing and Lending”. The report defines Direct Borrowing and Lending, sizes the market, evaluates pros and cons and offers recommendations for getting started.
2015 is shaping up to be the year of the securities lending CCP; banks, agent lenders and beneficial owners are all now preparing themselves for this important market move. The driver of change is that Basel III, Dodd-Frank and EMIR are starting to sink in, and borrowers need to optimize their capital usage. While repetitive to say, it remains true that the more seriously banks look at capital, the more they are evaluating all available alternatives for capital cost management. Market attitudes towards securities lending CCPs have evolved as well, and in 2015, a part of the capital solution will be found on these platforms.
On December 11, 2014, SEC Chair Mary Jo White gave a speech at a New York Times conference in New York, “Enhancing Risk Monitoring and Regulatory Safeguards for the Asset Management Industry.” She had some overdue comments on asset managers and transparency, particularly around securities lending activities. We review her comments and add what we would like to see.