Equities First – Shadow Banking Systems Increased the Dependency of Stock Loans
It is all the mess in traditional institutions that caused tightening of lending regulations, high interests’ rates and fewer borrowers meeting the minimum borrowing standards. There was a significant blame placed on freezing credit markets against the parallel banking system also referred as “shadow banking system”. The entities became vital to the credit markets that underpinned the financial system, but not subjected to the similar regulatory controls. More so, the entities were vulnerable as a result of maturity mismatch indicating that they acquired short-term within the liquid markets to buy long-term, risky and illiquid assets. With that, disruptions with credit markets would ensure they were subjected to quick deleveraging, trading their long-term resources at depressed costs. As a result, the alternative lending sector particularly those dealing with stock-based loans are getting a high traction of clients seeking for working capital. Equities First is among the key global institutions that are offering numerous borrowers of stock loans on daily basis. The company was started in 2002 and with many years of experience, analysts have described it as a leader & lender in alternative lending services and learn more about Equities First.
At the beginning of 2007, asset-backed commercial paper channels within structured investment vehicles, dealing with auction-rate preferred securities, variable rate demand notes, and tender option bonds, encountered a combined asset size of nearly $2.2 trillion. Assets held within hedge funds extended to approximately $1.8 trillion. The mixed balance sheets of the key five investments banks had the total of $4 trillion. In comparison, the whole assets of the key five bank holding organizations within United States during the time were more than $6 trillion and the total assets of the whole banking system totaled approximately $10 trillion. The combined influence of these issues led to a financial system that was susceptible to self-reinforcing credit cycles and asset price. Stock loans are covering the menace with potential investors getting a financial refuge at Equities First Holdings (http://www.equitiesfirst.co.uk/).