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Securities Lending Market Report | H2 2025

>>> Fixed Income

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As shown in Figure 2, H2 European Equity Market, strong market valuations contributed to the rise in group lendable, while At the June 5th 2025 European Central Bank meeting , President Christine Lagarde signalled a potential move out of the
balances typically remained stable. In H2, while balances didn’t eclipse the H1 peak of $256 billion and dropped to a low of rate cutting environment, saying “We are getting to the end of a monetary policy cycle”. This proved to be the case with
$186 billion, they did remain relatively stable across the semester with balances around the $220 billion, closing the year the 25bps rate cut in June being the last of 2025, leaving the interest rate unchanged at 2.15% for H2, down 100 basis
28% up from January. Loans vs cash accounted for about 15% of the total European loan balances in 2025, closing the year points in total for the year.
on $28bn vs $177bn in non-cash. 2025 provided further growth in the ETF market, buoyed by higher fees and balances, Across Europe, despite the declining interest rates, sovereign In the lead up to the UK budget, there were concerns over
with revenues of $526 million globally, an increase of 42% . While the US market continues to dominate this space, EMEA bond yields continued to climb given the market uncertainty, fiscal policy, with potential increased debt issuance creating
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growth has been steeper with a 77% increase, earning $69 million revenue for the year. though tight monetary policy kept inflation stable across the uncertainty in the gilt market and yields fluctuating across
region, with most of Europe staying at or near the ECB’s 2% maturities. The Bank of England took a dovish stance,
Fig 2 - H2 European Equity Market target. This enabled the ECB to continue the quantitative cutting interest rates to 3.75%, a total reduction of 1% for
tightening measures in a move to reduce liquidity and shrink the year. The impact on the securities lending market meant
European Equity Market their balance sheet. gilts balances were up year-over-year, with revenues of
$570 million.
4.15 250.00 Improvement of energy supply chains and investment in Expansion of collateral continues to be a key theme across
Lendable Value (Trillions €) 4.00 150.00 On-Loan Value (Billions €) reduced the need for further rate cuts. This made for limited quality liquid assets (HQLA) as borrowers seek to adhere to
cross-border infrastructure helped reduce energy prices,
4.10
4.05
200.00
which was a key contributor to the economic growth and
the market; Equity upgrade trades remain well bid vs high-
3.95
regulatory requirements and meet their liquidity needs and
number of specials in the European Government Bond
3.90
(EGB) market, while demand for structured general collateral
3.85
risk metrics. While US Treasuries (USTs) continue trade at a
100.00
3.80
premium over their European equivalents, demand for EGB’s
(GC) trades remained robust. As seen in Figure 3 European
3.75
Government Bond Market, balances rose into year end with
remains robust.
50.00
3.70
3.65
3.60
Jul 2025 Aug 2025 Sep 2025 Oct 2025 Nov 2025 Dec 2025 0.00 a high of nearly $467 billion on loan for the year.
Group Lendable On-Loan Balance
Fig 3 - European Government Bond Market
European Government Bond Market
1.45 480.00
Lendable Value (Trillions €) 1.30 420.00 On-Loan Value (Billions €)
1.40
460.00
1.35
440.00
1.25
400.00
1.20
380.00
1.15
360.00
1.10
1.05
320.00
1.00
Jan 2025 Feb 2025 Mar 2025 Apr 2025 May 2025 Jun 2025 Jul 2025 Aug 2025 Sep 2025 Oct 2025 Nov 2025 Dec 2025 340.00
Group Lendable On-Loan Balance

4. Source: DataLend
5. Source: https://www.ecb.europa.eu/press/press_conference/monetary-policy-statement/2025/html/ecb.is250605~f00a36ef2b.en.html