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Regulators risk hurting securities lending
28 June 2012
The abundance of regulatory initiatives towards
securities finance risks smothering the industry it seeks
to protect, finds Brian Bollen
The sheer number of potential constraints that could be placed on an activity that is still pursued by only a relatively modest number of financial services institutions could see regulatory efforts collapse under their own weight. This is one of the key messages that emerges in discussion with industry experts on pieces of regulatory reform such as Basel III, Dodd-Frank and EMIR and the work of the Financial Stability Board (FSB).
So anxious are the organisations responsible for each piece of reform to be seen as doing something constructive – but which the industry sees as unnecessarily restrictive, even arbitrarily restrictive – that they can find themselves duplicating or even negating each other’s efforts.
Paul Wilson, managing director at JPMorgan Worldwide Securities Services, diplomatically sums up the situation: “There is a great deal of uncertainty in how the various initiatives will impact upon securities lending.”
He identifies several key areas, beginning...
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