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Securities Lending Market Report | H2 2024

Fixed Income

Introducing the

>>> Global ISLA Securities Lending

Fig 1 - S&P Global
& Borrowing Hub
Global Government Bond Market

4.80 1.60
Lendable Value (Trillions €) 4.20 1.40 On-Loan Value (Trillions €) Your ultimate resource for all securities lending
4.60
1.50
4.40
and borrowing information
4.00
1.30
3.80
1.20
3.60
3.40
3.20
1.00
3.00
Deep Dive into the Benefits of Securities Lending
Jan 2024 Feb 2024 Mar 2024 Apr 2024 May 2024 Jun 2024 Jul 2024 Aug 2024 Sep 2024 Oct 2024 Nov 2024 Dec 2024 1.10 Learn About the Key Market Participants
Group Lendable On-Loan Balance Get your Questions...Answered
Geopolitics remained a consistent theme impacting market sentiment, with the lingering war in Ukraine and more recent Access the Latest Market Data
Israel-Palestinian conflict leading to further heightened concerns around market risk. These instances have broadly led to
a flight-to-quality, with a notable bid for dollar-denominated bonds.

Elections in much of the world prompted ongoing market Similar to recent years, regulation has continued to shape
nervousness, with the new US administration posing the wider industry with the new US administration expected
significant risk across global emerging markets. Concerns to ease the regulatory burden on banks. This could lead
over the Chinese economy have also been maintained, to some dislocation versus international peers, potentially
while Trump’s “America First” policies threaten to further disadvantaging non-US banks. Most of the focus remains on
harm international relations. While the election results in the Basel III Endgame, and at time of writing, it is unclear if
early November prompted a rally in risk assets, it continued the Trump administration will alter the Basel rules or even
to negatively impact sentiment in many major economies, mark the “Endgame for Endgame”. The recent resignation of
with the likely imposition of trade tariffs with Canada, China, the Federal Reserve Vice Chair for Supervision, Michael Barr,
and Mexico as the President pushes forward with plans to makes this increasingly likely. The early departure means the Scan to find out more
protect the dollar’s position as the world’s reserve currency. replacement in the supervisory role could likely push for a
more industry-friendly rule book, thus potentially benefitting
In contrast with 2023 when markets had to contend with
the US regional banking crisis and demise of Credit Suisse, US banks.
2024 was a year of counterparty stability. New entrants are Lastly, the US and Canada successfully adopted the move
emerging, which is encouraging for broader market liquidity, to an accelerated T+1 settlement cycle in May 2024. In
while current borrowing counterparties are increasingly contrast with prior concerns around settlement discipline,
focussed on the expansion of trading services. the relatively smooth North American process paves the way
for other markets to adopt the same measures, with Europe
In terms of new markets, fixed income activity has largely and the United Kingdom expected to transition in 2027,
focused on market expansion as opposed to new pools of benefitting from “second mover advantage”.
assets. Unlocking Asian bonds to lend, and equities to take
as collateral should remain a theme as progress through
2025. The opening of Saudi Arabian equity markets will
present opportunities, with securities lending agents ready
to provide liquidity, growing on-loan balances and widening
collateral acceptance accordingly.