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The Changing Times
The Changing Times

The Changing Times


BNP Paribas Securities Services’ Ross Bowman talks about the latest trends in the securities lending market and the growing needs of beneficial owners

Changes to the use of, demand for and regulation of collateral have been a big driver of change in the securities lending market. When comparing what current collateral is being held in tri-party versus what was being held a year ago, you can see that equity collateral has fallen from 49% to 41%, although the use of government bonds as collateral has increased from 39% to 48% over the same period.

This shift in what banks are looking to give up as collateral is paradoxical to some extent, says Ross Bowman, business development, securities finance, Market & Financing Services, BNP Paribas Securities Services.

"The lending of high quality liquid assets (HQLA) has been a big trend in the last year, and the acceptance of equity collateral has played a major part in this revenue stream for lenders. However, as banks have become more efficient at managing their balance sheets, the amount of equities readily available to give up as collateral has fallen", he says.

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