SECURITIES FINANCE

Global securities lending hits $2 trillion mark

Latest data from securities finance market data provider DataLend reveals the securities lending industry is now a $2 trillion business.

By Paul Walsh paul.walsh@strategic-i.com March 13, 2017 2:25 PM GMT
The value of securities on loan has surpassed the $2 trillion mark, according to securities finance market data provider DataLend.

The milestone represents an increase of $180 billion year-on-year. It is also the highest figure since DataLend - the securities finance market data division of Equilend - began tracking the market in 2013.

Other figures revealed the lendable value, referring to the value of securities lenders have made available for borrowing, surpassed $16 trillion a year-on-year increase of $2.75 trillion.

Lenders earned $9.16 billion in securities lending revenues in 2016. This included $4.67 billion in North America, $2.64 billion in Europe, $1.67 billion in Asia-Pacific and $182 million in the rest of the world.

In total, more than 45,000 unique securities are on loan worldwide.

Speaking to Global Custodian earlier this year, co-CEO of Clearstream Banking Phillippe Seyll, spoke of how the securities lending market had seen improvement due to a collateral shortage and impact from quantitative easing (QE).

“It seems the market believes QE will not slow down in the next 12 months, meaning we can see some shortage of good collateral in the market.

“The scarcity of good collateral makes the business of securities lending positive.

“QE has definitely had a positive impact on the space as QE removes higher quality securities (HQLA) from the market, meaning the price of what is scarce is increasing,” said Seyll.