SECURITIES LENDING & REPO MARKETS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - OCTOBER 2010

OVERVIEW OF THE SECURITIES FINANCING MARKETS

particularly desirable, as they are considered high quality and highly liquid collateral. Both UK gilt government bonds and equities continue to have the largest lendable pool of assets compared to their European peers.

Figure 14: Lendable assets and total on loan, Europe (Q2 2010)

Lendable assets (USDMM) Total on loan (USDMM) Total on loan (%)

European bonds

137,075

31%

444,166

> French sovereign

17,417

26%

68,154

> German sovereign

41,359

39%

104,844

> Italian sovereign

5,571

12%

48,371

> Spanish sovereign

3,728

22%

17,331

> Other € sovereign

13,020

22%

58,767

> UK gilts

55,980

38%

146,700

European equities

135,796

12%

1,108,676

> French

35,822

23%

152,910

> German

29,194

22%

133,800

> Italian

10,071

22%

46,410

> UK

19,391

5%

418,843

> Scandinavian

15,854

16%

97,212

> Other European

25,464

10%

259,500

Source: RMA quaterly aggregate data survey, Q2 2010

With regard to the European equities lending market, lendable assets reached USD111bn in Q2 2010 for a total on loan of USD14bn. France and Germany are the most active equities lending markets in Europe, with respective market shares of 26 and 22% in terms of value of equities on loan in Q2 2010 (see pie chart below). Both countries, as well as Italy, enjoy high “total on loan/lendable assets” ratios (22 to 23%).

Figure 15: European equities on loan, breakdown by country (Q2 2010)

19%

OTHER

26%

FRANCE

12%

SCANDINAVIA

22%

GERMANY

14%

UK

7%

ITALY

Source: RMA quaterly aggregate data survey, Q2 2010

page 26 | Securities Lending & Repo markets