ISLA conference: time for sec lending and repo to buddy up
19 June 2013 Prague
Image: Shutterstock
Securities lending and repo desks should move closer together to provide a better overview of collateral, according to one panellist at the International Securities Lending Association鈥檚 (ISLA鈥檚) annual conference in Prague.
Prior to a panel on collateral, attendees were asked whether the desks should move closer together, with 92 percent of respondents saying that they should.
One panellist agreed, after pointing out that a 鈥榞lobal collateral shortfall鈥�, as some have described it, may be off the mark, with more than 70 trillion securities available worldwide.
鈥淪ecurities lending and repo desks should move closer together, as a lot of collateral is wasted. Coming together is more efficient.鈥�
Another panellist said that as central banks stop pumping liquidity into markets, the practice of collateral multiplication, in which counterparties re-use collateral to create new credit lines, may be affected.
This could 鈥渉urt the real economy鈥� in turn, explained the panellist.
Prior to a panel on collateral, attendees were asked whether the desks should move closer together, with 92 percent of respondents saying that they should.
One panellist agreed, after pointing out that a 鈥榞lobal collateral shortfall鈥�, as some have described it, may be off the mark, with more than 70 trillion securities available worldwide.
鈥淪ecurities lending and repo desks should move closer together, as a lot of collateral is wasted. Coming together is more efficient.鈥�
Another panellist said that as central banks stop pumping liquidity into markets, the practice of collateral multiplication, in which counterparties re-use collateral to create new credit lines, may be affected.
This could 鈥渉urt the real economy鈥� in turn, explained the panellist.
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