Daily Archives: September 15, 2009

Pauline Skypala

Where is financial innovation coming from in these days of (slightly) chastened banks? Look no further than index providers. The profit to be made from joining the index game has tempted Thomson Reuters to throw its hat into the ring, as we reported in FTfm yesterday.

Now S&P has announced an intriguing new securities lending index series, designed to measure the average cost of borrowing US equities. What does it portend when an activity like securities lending gets its own index? S&P says it is bringing transparency to opaque over-the-counter transactions, and providing both lenders and borrowers with a means of hedging (against rate increases that would decrease revenue streams or against costs, respectively). The indices can also be used to speculate on the direction of markets, S&P points out.

The ingenuity of index providers knows no bounds. What next? An index of bank bonuses or CEO pay perhaps? Tracking those might be worthwhile!

About the blog

FTfm is no longer updated but it remains open as an archive.

FTfm's specialist writing team offer their insights into the global fund management industry.

About the authors

Pauline Skypala has been editor of FTfm for four years having previously been deputy personal finance editor. She joined the FT in 1999 and has been writing on savings and investment issues throughout her career.

Steve Johnson, FTfm deputy editor, has been a journalist for 17 years, 10 of which have been with the FT.

Sophia Grene, reporter on FTfm, has been a financial journalist in print and online for 12 years.

Ruth Sullivan has worked as a financial/business journalist and foreign correspondent and for the past 10 years has been at the FT.