Securities Lending Virtual Roundtable

rt-buttonseclendingaiThe recent publication of a  BNY Mellon report on the need to be more efficient in the use of collateral makes the subject of securities lending and related activities a timely one to discuss in one of the popular series of ISS virtual round tables, in which we gather the thoughts of Gareth Mitchell, managing director, global head of trading, Agency Securities Lending Citi, Bill Foley, director, Foley O’Neill and Etienne Ravex, head of product management for operations, Murex.

ISS: What are the pros and cons of using equity as collateral?

Gareth Mitchell, Managing Director, Global Head of Trading, Agency Securities Lending Citi: Clearly accepting equities as collateral against the lending of equities can significantly increase the correlation of the overall exposure to a borrower and therefore reduce risk, assuming a diverse, non-concentrated portfolio of loans and collateral. Lending HQLA (high quality liquid assets) versus equities, however, represents a different risk entirely to a lender.

To read the full roundtable click here