13 March 2017
London
Reporter: Drew Nicol

Securities lending industry breaks through $2trn mark


Global on-loan securities are worth more than $2 trillion for the first time since 2013, according to market data provider DataLend.

The latest valuation saw on-loan securities rise by more than $180 billion from March of last year.

The amount of securities available for borrowing also broke DataLend’s previous record to now sit at more than $16.4 trillion, up $2.75 trillion in 2016.

More than 45,000 unique securities are on-loan worldwide.

The achievement marks new heights for the securities lending industry, which has seen a steady rise in on-loan value over the past 12 months.

The International Securities Lending Association’s latest industry report put on-loan securities at €1.9 trillion as of 30 June 2016—a 4 percent increase on the previous six months.

According to DataLend, lenders earned $9.16 billion in 2016, with North American lenders claiming the lion’s share of $4.67 billion.

Europe followed on $2.64 billion, with the Asia Pacific making up $1.67 billion and the rest of the world accounting for the final $182 million.

The use of cash collateral fell by 6.4 percent over the same period to sit at 39.48 percent, likely due to persistent low and negative interest rates.

Speaking on the latest data, Chris Benedict, director at DataLend, said: “The recent rise to more than $2 trillion on loan in the securities lending industry is likely due to growth in the global capital markets along with the asset values of the securities on loan and in inventory."

"A major shift in the capital markets in the future would likely have an impact on loan and inventory values, either positive or negative.”

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