Securities lending

August 2023

Securities lending programs have the ability to generate modest incremental revenue for investors. During most periods, risk of loss is minimal; however, during periods of market disruption, the potential for liquidity impairment or loss exists.

Investors may find that controlled exposure to securities lending can provide added income with an acceptable risk level, especially in an environment of elevated interest rates. The amount of income, and risk, in any securities lending program is significantly determined by how the borrowing collateral is invested and the counterparties to which the lender is exposed.