Populist parties in Europe may hinder EU-level development, says Dyson
06 September 2024 UK
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The International Securities Lending Association (ISLA) has released its newest ‘Securities Lending Market Report’ which explores the key factors impacting the market.
In the political landscape, ISLA CEO Andrew Dyson believes the rise of “far-right” parties in Europe may hinder EU-level development, due mainly to the traditional emphasis on national sovereignty from this end of the political spectrum.
He highlights that financial stability across the globe is a key area of economic policy to watch out for, and raising additional funds through taxation to incentivise investment flows has become a priority to fund future expansion.
Deep and open capital markets are one of the strongest indicators of a healthy economy.
With governments hoping to bounce back after “recent disruptions”, Dyson says politicians are keen to highlight their “economic prowess” by discussing financial regulation and central banking, while working to build more robust and competitive capital markets.
In terms of accelerating the settlement cycle to T+1, Dyson highlights this as a key example of the blurring lines between regulation and politics.
He explains that many governments are viewing the shortening of settlement times as a driver of growth and global alignment.
ISLA says it will be active in Brussels and across Europe to position securities lending as a tool to support the aims of the EU’s Capital Markets Union (CMU).
The association will look to unlock untapped supply to aid liquidity and tweak existing rules to further capital efficiency.
Looking ahead to H2 2024 and 2025, the ISLA report indicates that volatility has returned and will continue to feature in global markets.
Clearstream’s James Cherry, head of collateral, lending and liquidity solutions, business development, and Alex Roques, head of securities lending trading and distribution, delve further into the details of the coming year.
The continued volatility will create opportunities in securities lending, they say. Structurally, Cherry and Roques expect the market to continue to move towards a state of normality with declining rates and a tapering of central bank interventions.
Enhancing operational efficiencies and adapting to the evolving regulatory landscape will be crucial to ensuring sustainable returns in a complex market environment.
Meanwhile, they indicate that pledge solutions continue to feature in discussions and are becoming a “significant feature of the market”, across which there is an intense and growing focus on “the cost of doing business”.
Cherry and Roques conclude: “Overall securities finance markets continue to navigate a period of transition. Maintaining a strategic and adaptable approach will be key for participants aiming to optimise returns and manage risks in the evolving landscape.”
In the political landscape, ISLA CEO Andrew Dyson believes the rise of “far-right” parties in Europe may hinder EU-level development, due mainly to the traditional emphasis on national sovereignty from this end of the political spectrum.
He highlights that financial stability across the globe is a key area of economic policy to watch out for, and raising additional funds through taxation to incentivise investment flows has become a priority to fund future expansion.
Deep and open capital markets are one of the strongest indicators of a healthy economy.
With governments hoping to bounce back after “recent disruptions”, Dyson says politicians are keen to highlight their “economic prowess” by discussing financial regulation and central banking, while working to build more robust and competitive capital markets.
In terms of accelerating the settlement cycle to T+1, Dyson highlights this as a key example of the blurring lines between regulation and politics.
He explains that many governments are viewing the shortening of settlement times as a driver of growth and global alignment.
ISLA says it will be active in Brussels and across Europe to position securities lending as a tool to support the aims of the EU’s Capital Markets Union (CMU).
The association will look to unlock untapped supply to aid liquidity and tweak existing rules to further capital efficiency.
Looking ahead to H2 2024 and 2025, the ISLA report indicates that volatility has returned and will continue to feature in global markets.
Clearstream’s James Cherry, head of collateral, lending and liquidity solutions, business development, and Alex Roques, head of securities lending trading and distribution, delve further into the details of the coming year.
The continued volatility will create opportunities in securities lending, they say. Structurally, Cherry and Roques expect the market to continue to move towards a state of normality with declining rates and a tapering of central bank interventions.
Enhancing operational efficiencies and adapting to the evolving regulatory landscape will be crucial to ensuring sustainable returns in a complex market environment.
Meanwhile, they indicate that pledge solutions continue to feature in discussions and are becoming a “significant feature of the market”, across which there is an intense and growing focus on “the cost of doing business”.
Cherry and Roques conclude: “Overall securities finance markets continue to navigate a period of transition. Maintaining a strategic and adaptable approach will be key for participants aiming to optimise returns and manage risks in the evolving landscape.”
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