Arab Today, arab today custody banks gain from european crisis
Last Updated : GMT 06:22:54
Arab Today, arab today
Arab Today, arab today

Custody banks gain from European crisis

Arab Today, arab today

Arab Today, arab today Custody banks gain from European crisis

London - Arabstoday

A group of specialist banks are profiting from Europe\'s financial crisis, thanks to a surge in demand for securities which allow traders to bet against bank stocks and government bonds. The so-called custody banks that administer securities, a normally unglamorous and low-margin business, include BNY Mellon, JP Morgan and State Street. The banks, as well as loan specialist Equilend, take a fee for linking lenders with surplus stock — typically pension funds — with borrowers such as hedge funds and banks, who want to position themselves in markets by short-selling. Pension funds and insurers have become increasingly attracted to lending by the fees they accrue from the borrowers at a time when equity returns are off. The latter want stocks or bonds to sell them in the hope that their price will fall over time. They can then buy back the securities at a lower rate and pocket the difference before returning them to the lender. \"There were many trading opportunities in 2011,\" said James Slater, global head of securities lending at BNY Mellon. \"Activity in the second half was driven by (hedge) funds, reacting to global events like the Eurozone crisis.\" JP Morgan and State Street both saw lending levels rise in 2011, while Equilend, whose electronic systems match firms wanting to lend with prospective borrowers, saw its trading levels spike in August. \"Clearly volatility is a part of that but we\'ve added more new clients this year than any other and they are using more of our services,\" said Equilend Chief Executive Brian Lamb. The peak activity in Aug-ust, when Equilend trading hit 27,770 loans worth $21.3 billion (Dh78.22 billion) in one day, was partly driven by the worsening Eurozone crisis, during which traders borrowed assets to bet on falling markets. Equilend is owned by 10 large financial firms including Credit Suisse, Goldman Sachs, Morgan Stanley and UBS, custodians Northern Trust and State Street, and fund manager Blackrock. Some volatility tends to help boost trading and stock lending in the short-term but prolonged volatility breeds uncertainty which depresses the markets and, therefore, the ability to make money short-selling. \"I suspect 2012 is going to remain challenging, without a speedy resolution to the Eurozone situation and a generally more positive market outlook,\" said Paul Wilson, global head of client management and sales at JP Morgan Worldwide Securities Services. But the stock lending agents could benefit from regulatory efforts to force over-the-counter (OTC) derivatives trading to go via clearing houses, known as central counterparties (CCPs), in order to improve transparency. Cash-strapped banks and brokers are already struggling for collateral to support their trading units and this situation will be compounded when regulators start to demand extra collateral from banks trading in the lucrative OTC markets. Lending houses The world\'s top stock lending houses may have ended 2011 up on previous years but sustained volatility and a drop in demand towards the end of the year have raised questions over the outlook for 2012. Lending rates in the latter part of the year were also affected by bans on the short-selling of some European bank stocks. \"The extreme volatility in equity markets coupled with the continuation of short sell bans across many European countries contributed to a decrease in trading opportunities for much of the second half of the year,\" said Don D\'Eramo, senior managing director, securities finance, EMEA, at State Street.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today custody banks gain from european crisis Arab Today, arab today custody banks gain from european crisis

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today custody banks gain from european crisis Arab Today, arab today custody banks gain from european crisis

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today What's the reason and what you can do

GMT 05:44 2017 Sunday ,22 October

What's the reason and what you can do
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Syrian children die of hunger

GMT 19:25 2017 Sunday ,22 October

Syrian children die of hunger
Arab Today, arab today Maltese demand justice for murdered

GMT 06:08 2017 Monday ,23 October

Maltese demand justice for murdered
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today EU raids automaker BMW

GMT 11:06 2017 Saturday ,21 October

EU raids automaker BMW
Arab Today, arab today Sweden to get biggest car factory

GMT 14:10 2017 Friday ,20 October

Sweden to get biggest car factory
Arab Today, arab today Actress Mona Zaki praises husband’s role

GMT 08:15 2017 Thursday ,19 October

Actress Mona Zaki praises husband’s role
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 08:57 2017 Wednesday ,18 October

Actress Shery Adel happy for Egypt’s qualification

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 06:07 2017 Sunday ,22 October

15,000 Under Fives Die

GMT 13:44 2017 Friday ,20 October

Barcelona through George Orwell’s eyes

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday