Shadow banking inquiries = transparency in seclending?

As the Financial Stability Board has announced that securities lending and repo are one of its five focus areas in the shadow banking industry, will this mean that the conversation about transparency in securities lending finally comes to a head?

The recent FSB report on ETFs, while accurate on derivatives, was notably sketchy when it came to securities lending. The FSB’s comments in this area hinted at hyperbole, for example when discussing the possibility of a short squeeze due to ETF redemptions forcing the recall of securities lent from a pool of physical underlyings.

SecFinMonitor to Financial Stability Board: please, get the story straight before making recommendations and issuing warnings on market stability. Thanks.

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