How have lenders actually responded to the credit crunch?

In January 2008, Data Explorers Consulting, formerly known as Spitalfields Advisors published the paper “The Impact of the Credit Crunch upon the Securities Lending Market”. The paper commented on important developments in the credit and money markets, the relevance of the developments on the securities lending market and identified some questions and issues worthy of further consideration.

One of the questions we asked related to beneficial owners’ understanding of risk in their securities lending programmes. There is increased demand for risk reporting at a board level so the ability to articulate the risk exposure in a securities lending programme is now a necessity. Have discussions between lending agents and beneficial owners been sufficiently in depth to allow detailed risk assessments to be made? Well now we are pleased to bring you an example of the types of discussions that have been occurring.