BlackRock Addresses Regulators’ Concerns Over Securities Lending

Following concerns expressed in a recent staff report by the Federal Reserve Bank of New York about securities lending, BlackRock reiterates that its securities lending infrastructure has already brought together best investment practices and prudent risk management that address the regulators’ concerns.

In its May 2015 report titled “Securities Lending: The Facts”, BlackRock elaborates how it addresses the various concerns expressed by the NY Fed.

Concerns over cash and non-cash collateral

BlackRock points out that since the 2008 Financial Crisis, significant regulatory reforms have been implemented for securities lending by various authorities including Financial Stability Board, European Commission, and Securities and Exchange Commission. However, the BlackRock’s report notes several common misunderstandings have arisen regarding securities lending practices and associated risks, including potential...