Top Trends in Securities Lending: The Road to Recovery and Evolution

by Medy Agami, August 6, 2012
EMEA, North America

Abstract

The road to recovery and evolution in the securities lending market has been more of a rocky path, halted by numerous complications. Regulatory uncertainty continues to hamper market demand.

In a new report, Top Trends in Securities Lending: The Road to Recovery and Evolution, Celent examines various recovery and evolutionary factors in the securities lending market as they relate to supply and demand.

Additional transparency is a goal of all market regulations. This could result in different scenarios around reporting or possibly central clearing of securities lending transactions. The opportunities regulations bring with regard to collateralizing cleared derivatives contracts could generate increased demand to borrow high quality assets.

“Lenders are optimistic about the future of securities lending, while borrowers continue to be skeptical due to deleveraging and volatility,” says Medy Agami, Analyst with Celent’s Securities & Investments group and author of the report.

This report assesses market dynamics and regulatory developments by geography. It also provides predictions on the future direction of the securities lending market and direction for various market segments.

This 18-page report contains seven figures and four tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

2

Market Overview

3

 

Market Size and Conditions

3

 

Historical Evolution

5

 

Fee Breakdown

5

 

Regulation

6

 

Technology

7

Recovery and Evolutionary Opportunities

10

 

Diversifying Collateral Types

10

 

Transparency

11

Future Direction

12

 

Central Counterparty (CCP) Model

12

Conclusion

16

Leveraging Celent’s Expertise

17

 

Support for Financial Institutions

17

 

Support for Vendors

17

Related Celent Research

18

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