A Multiple Lender Approach to Understanding Supply and Search in the Equity Lending Market

  title={A Multiple Lender Approach to Understanding Supply and Search in the Equity Lending Market},
  author={Adam Kolasinski and Adam V. Reed and Matthew C. Ringgenberg},
  journal={Mutual Funds},
Using unique data from 12 lenders, we examine how equity lending fees respond to demand shocks. We find that when demand is moderate, fees are largely insensitive to demand shocks. However, at high demand levels, further increases in demand lead to significantly higher fees and the extent to which demand shocks impact fees is also related to search frictions in the loan market. Moreover, consistent with search models, we find significant dispersion in loan fees, with this dispersion increasing… 
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