Moody's: ESMA guidelines are "credit negative" for asset managers

Moody's has said new ESMA guidelines on ETF stock lending are "credit negative" for asset managers and will hit profitability - but will also spark an uptick in investor interest.

Moody's said the new European Securities and Markets Authority (ESMA) guidelines, published last week, will improve transparency but hurt profitability for groups such as BlackRock and State Street because of higher compliance costs and the ban on securities lending. "The guidelines are credit negative for asset managers that sponsor ETFs in Europe...