Sec lending aids price discovery
20 October 2016 Oslo
Image: Shutterstock
The importance of an active securities lending market has been emphasised as a way to counter passively managed portfolios and ensure efficient price discovery.
In its recent report into the role of securities lending in the wider financial market, Norges Bank Asset Management argued that securities lending “is particularly relevant when ownership of assets is concentrated amongst relatively few, large market participants—characterising the current market environment”.
“A greater percentage of shares outstanding in passively managed portfolios also increases the importance of a well functioning stock lending market for price discovery.”
“This contribution to well-functioning markets is one of the key considerations for our active participation in stock lending markets,” Norges explained.
In its recent report into the role of securities lending in the wider financial market, Norges Bank Asset Management argued that securities lending “is particularly relevant when ownership of assets is concentrated amongst relatively few, large market participants—characterising the current market environment”.
“A greater percentage of shares outstanding in passively managed portfolios also increases the importance of a well functioning stock lending market for price discovery.”
“This contribution to well-functioning markets is one of the key considerations for our active participation in stock lending markets,” Norges explained.
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