In the world of investment, diversification and risk management are key strategies for achieving financial goals while minimizing exposure to market volatility. One often overlooked tool in achieving these objectives is securities-backed lending (SBL). While traditionally used for liquidity needs or opportunistic investments, SBL can also serve as a powerful tool for portfolio diversification and...Read More
The integration of advanced financial technologies (fintech) across capital markets continues accelerating the modernization of securities-based lending. This covers financing against investment portfolios like equities and bonds, including margin lending from brokers and specialized non-purpose facilities from incumbent lenders plus emerging fintech platforms. The ongoing enhancement of automation, data analytics and blockchain systems is driving...Read More
Securities Backed Lending (SBL), leveraging assets as collateral, unlocks liquidity and fuels economic activity. However, this intricate landscape demands clear governance structures to ensure transparency, protect interests, and mitigate risks. In this complex ecosystem, three key players emerge: Trustees, Custodians, and Agents, each with distinct roles crucial for successful SBL transactions. Trustees: Guardians of the...Read More
The rapid growth of securities-based lending markets raises important ethical questions around appropriate product design, sales practices, and risk transparency by financing providers. This covers margin loans from brokers and specialized non-purpose lending facilities allowing clients to borrow against investment portfolio collateral. As financiers increasingly rely on scoring algorithms and automated decisioning, responsible controls must...Read More
Central banks wield immense power, influencing economic activity through various policy tools. One crucial tool is monetary transmission, the mechanism through which adjustments in central bank rates ripple through the financial system, impacting borrowing costs, investments, and ultimately, economic growth. In this complex dance, Securities Backed Lending (SBL) emerges as a potential partner or disruptor,...Read More
