Custody banks net short-selling gains from EU crisis
(Reuters) - A group of specialist banks are profiting from Europe's financial crisis, thanks to a surge in demand for securities which allow traders to bet against bank stocks and government bonds.
The so-called custody banks that administer securities, a normally unglamorous and low-margin business, include BNY Mellon, JP Morgan (JPM.N) and State Street (STT.N).
The banks, as well as loan specialist Equilend, take a fee for linking lenders with surplus stock -- typically pension funds -- with borrowers such as hedge funds and banks, who want to position themselves in markets by short-selling.
Pension funds and insurers have become increasingly attracted to lending by the fees they accrue from the borrowers at a time when equity returns are off.
http://www.reuters.com/article/2012/01/10/us-lending-eurozone-idUSTRE8090VK20120110
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