Sure enough, seclending and repo are central to financial markets

Securities Lending Times had a great comment out this morning: securities lending and repo came up the Association for Financial Markets in Europe (AFME) liquidity conference yesterday. A group of economists were discussing deleveraging in financial markets and brought up, without any apparent prompting, that securities lending and repo needed to regain some lost activity in order to support other parts of financial markets. This is extremely interesting to us for the following reasons:

First, people not connected with securities lending and repo in any noticeable way were talking about this stuff, which speaks to how much prominence securities lending and repo have gained over the last several years. This is a far cry from 2007 when you could say securities lending and most people would give you a confused look.

Second, we agree that financial markets are complex systems, and moving a level here affects an outcome way over there. Our research has shown time and again how fundamental securities lending and repo are to the smooth functioning of the system overall. its nice to hear someone else say it too.

Third, this comment happened at a major conference. This kind of thing will be heard by not only audience participants but also picked up in the press (clearly that’s how we heard about it). Regulators will get wind as well.

Here’s to the economist who brought this up first, and kudos to SLT for blasting out the story. Here’s the original SLT article. We highly recommend forwarding SLT’s article, this post or both around to your office mates and management.

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