Borrowing against shares grows into a $5.4tn market, Deloitte finds (opens the source in a new tab)
- A Deloitte survey of big private banks and lenders, seen by WSJ, sizes securities-based credit lines at about $5.4tn, though actual borrowing is likely far lower.
- The rich pledge shares rather than sell, avoiding tax and keeping voting power. Lenders like it: approval is fast, losses are rare and the collateral sells quickly.
- Brokerages now offer it to the merely affluent, some approving loans in minutes, and a UK bank pitches a billionaire mindset to people with modest portfolios.
- $5.4tn
- securities-based credit lines
Why it matters A product built for billionaires is going mass market. In a sharp sell-off, forced sales of pledged shares could speed the fall.
Other side With cautious loan limits and quick liquidation, lenders rarely lose, and borrowers get cheap credit without a taxable sale. The risk sits with borrowers who misjudge a margin call.