Who will test the waters?
There is a lot of hype globally about credit derivatives, perhaps undeserved. Curiously, the focus is on how banks are shifting their credit exposure around, either selling it to institutional investors or passing it off to other banks, in such a way as to ensure a win-win for both sides.
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Lending safety to stock lending
The decision by the National Securities Depository Ltd to take the depository route to stock lending, on paper, should take care of the risk of getting back a security which is either tainted or is a bad delivery. Lending through dematerialised shares, again on paper, should ensure lending the basic safety in stock lending.
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