Global Association of Risk Professionals [GARP]: Capital Rules in EU Could Affect Securities Lending Elsewhere
Posted by Laura Saville on November 24, 2022
U.S. market participants, already facing tough requirements, may find some relief, writes John Hintze at Global Association of Risk Professionals, citing research from Credit Benchmark.
“European Union capital rules, to be implemented starting in 2025, are expected to dramatically increase bank capital requirements for securities lending and institutional-investor counterparties’ trading costs. According to a September Credit Benchmark report, that will depress securities financing activity and in turn reduce market liquidity and widen bid-offer spreads, potentially driving up trading costs by €20 billion to €40 billion annually.”
Global Association of Risk Professionals [GARP], November 23, 2022.
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