New EU capital rules scheduled for implementation in 2025 are likely to trigger a sharp rise in trading costs for buy-side firms in Europe, writes Bob Currie at Securities Finance Time, citing a recent report published by Credit Benchmark.
“The London-based credit consensus ratings and analytics company predicts that these changes may contribute to a 35 per cent decline in the securities lending income generated by European buy-side institutions, causing lending income to contract from its current €1.2 billion to less than €800 million.
It predicts that these changes are also likely to reduce market liquidity and to widen bid-offer spreads, resulting in a potential increase in the annual cost of trading of between €20 billion and €40 billion.“
The full original research cited by Securities Finance Times can be accessed here.
Securities Finance Times, September 6, 2022.