Commentary

Tuesday, April 16, 2024

Loan Recalls & the T+1 Countdown: Can Securities Lenders Adapt?

Time is Running out for Lenders to Prepare for T+1 and N-PX Loan Recall Wrinkles

Author: David Schwartz J.D. CPA
The T+1 settlement cycle and new proxy voting disclosure requirements present unprecedented challenges for the securities lending industry. The clock is ticking, and lenders failing to adapt swiftly risk significant operational and financial disruptions. Technology, communication, and collaboration are crucial for successful recall processes in a rapidly evolving landscape.    
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Monday, November 6, 2023

Predictive AI in Securities Finance: Step One

How to Develop an Efficient, Legally-defensible Machine Learning Infrastructure

Author: Ed Blount
On April 2nd, 2026, an effusion of data from a daily trove of U.S. regulatory filings will create resources to drive many new use cases for artificial intelligence in capital markets. A clear opportunity exists in securities finance, where practitioners have repeatedly stated that major IT investments will be needed to comply with the many new regulatory mandates. “Black box” AI platforms may seem a ready solution but can also create nightmares for client reviews and lawsuits.
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Friday, October 27, 2023

Beyond Benchmarking: The Race to Predictive Analytics in Securities Finance

10C-1 public data can reveal Watch Lists, but vendor data can predict market leverage and fees

Author: Ed Blount
When, on October 13, 2023, the Securities and Exchange Commission released its long-awaited final 10c-1 rule on reporting and public disclosure of securities loans, the most important passage, at least to the commercial data vendors who support the securities finance community, stated that, "the final rule could render existing securities lending data services less valuable, potentially leading to less revenue for the firms currently compiling and distributing these data for a...
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Thursday, September 28, 2023

Untold Stories of Market Manipulation: Archegos Capital

How Securities Lenders Unraveled the $100 billion Pump and Dump Scheme

Author: Ed Blount
By Ed Blount and Dan Hammond “In a matter of days, the companies at the center of Archegos’s trading scheme lost more than $100 billion in market capitalization,” Archegos owed billions of dollars more than it had on hand, and Archegos collapsed.”  This blog tells the untold story of how securities lenders in March 2021 became more than simply a source of liquidity to markets. Lenders became a market posse. Lawsuits dominated the business news about the...
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Tuesday, January 18, 2022

Balancing the Risks of Loan Disclosures for Traders

Is 10c-1 Regulatory Overreach? Or a Good Starting Point?

Author: Ed Blount

“The best trader I ever knew was broken when he took over a dying friend’s book. Everyone knew the book and turned on him.” Born in 1899, Henry Goldberg was the oldest trader on the floor of the New York Stock Exchange when I interviewed him in 1985. He answered my questions about trading expertise during a NYSE-sanctioned survey to find possible use cases for artificial intelligence. 

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Journal Commentaries

 

Keep Regulation Functional (October 2008)

CSFME’s Executive Director Ed Blount interviews SEC Chairman Chris Cox.
American Banking Association Banking Journal
https://www.questia.com/library/journal/1G1-187494664/keep-functional-regulation-how-financial-regulation

 

The Bear Market Posse, or Counterparty Risk Management during the Recent Turmoil (Sept.  2008)

by Ed Blount
The RMA Journal, v91n1, 28-32, 5 pages Sep 2008.

 

Searching for New Paradigms at BIS (July 2008)

by Ed Blount
Unexpected deficiencies in bank capital after recent market turmoil has regulators rethinking aspects of Basel II and “value at risk.”  
American Banking Association Banking Journal  
https://www.questia.com/library/journal/1G1-181991450/searching-for-new-paradigms-at-bis-market-turmoil

 

Will Basel II Affect The Competitive Landscape? (September 2003)

By Ed Blount
Newly elected Basel Committee Chairman Caruana, Governor of the Bank of Spain, gives his views on the revised Basel capital accord, relative to its potential effects on competition and risk management in banking markets.
American Banking Association Banking Journal
https://www.questia.com/read/1G1-108008773/will-basel-ii-affect-the-competitive-landscape-the​