Lendable assets will top $11 trillion, say Celent
07 August 2012 New York
Image: Shutterstock
Estimated worldwide total lendable assets are expected to be more than $11.6 trillion, stated Celent in its report: “Top Trends in Securities Lending: The Road to Recovery and Evolution.”
It also states that actual lending market on loan globally is approximately $2.5 trillion.
The survey asserted that securities lending has significantly evolved, shifting from a back office, operational function handled by investment banks and broker-dealers to being a major front office investment management and trading discipline that lodges a marked position in many broker and custodian banks.
Results indicated that lenders are optimistic about the future of securities lending, while borrowers continue to be skeptical due to deleveraging and volatility. “Despite the limitation on demand, persistent lenders will find different avenues to proliferate their securities lending business models, such as expanding into new markets and diversifying collateral types they are willing to lend against,” said the report.
Celent predicted that the CCP venue is a viable option for securities lending, but maintained that an OTC market will also exist.
“Furthermore, in the event a CCP model is mandated and the market moves to full implementation, custodians will still play a major role in the securities lending space; it would be highly unlikely for beneficial owners to go directly into the marketplace.
Not to mention that an exchange model would require significant operational and technological investments for all parties involved; borrower, lender, intermediaries, and CCP.”
It also states that actual lending market on loan globally is approximately $2.5 trillion.
The survey asserted that securities lending has significantly evolved, shifting from a back office, operational function handled by investment banks and broker-dealers to being a major front office investment management and trading discipline that lodges a marked position in many broker and custodian banks.
Results indicated that lenders are optimistic about the future of securities lending, while borrowers continue to be skeptical due to deleveraging and volatility. “Despite the limitation on demand, persistent lenders will find different avenues to proliferate their securities lending business models, such as expanding into new markets and diversifying collateral types they are willing to lend against,” said the report.
Celent predicted that the CCP venue is a viable option for securities lending, but maintained that an OTC market will also exist.
“Furthermore, in the event a CCP model is mandated and the market moves to full implementation, custodians will still play a major role in the securities lending space; it would be highly unlikely for beneficial owners to go directly into the marketplace.
Not to mention that an exchange model would require significant operational and technological investments for all parties involved; borrower, lender, intermediaries, and CCP.”
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