Who will close the gap between short-term securities loans and the LCR? (Premium Content)
We’re seeing a hole in the market, one that we thought would be solved already but that remains an attractive opportunity for an institution able to take on some maturity mismatch. On the one hand are institutions with US Treasuries looking for short-term loans. The loan volume for these institutions has fallen heavily; some utilizations are down to 20% or 30% due to a desire for loans of just a day or three. On the other hand are broker-dealers and banks looking for loans over 30 days to meet Liquidity Coverage Ratio obligations. How are these two ends going to meet in the middle?