ISLA welcomed over 80 local market participants at our Paris regional briefing kindly hosted by BNP Paribas.
Hélène Baudchon delivered her global macroeconomic update – ‘resilient, but still walking on a fine line’. Hélène suggested that the global economy has been surprisingly resilient in the face of the massive US trade war shock, with the Eurozone emerging as a relative winner due to improving growth momentum, controlled inflation, and a successful US-EU deal. While China’s growth is stable, it’s still battling deflation. Hélène’s baseline scenario projects a convergence of US and Eurozone growth rates as US growth slows, setting the stage for a monetary policy decoupling where the ECB is better positioned to cut rates than the Fed. While domestically, France remains ‘politically and fiscally strained’ but is showing unexpected economic robustness.
ISLA’s Farrah Mahmood & Andrew Dyson then discussed ISLA’s key focus areas for 2025 across regulation, taxation, markets and digital. Farrah referenced ESMA’s Call for Evidence on the Simplification of Transaction Reporting (DRR) and how we are beginning to position our work on standards and the CDM as a possible solution to the challenges around standardisation. Retail, against the backdrop of the hashtag SIU, is another area where ISLA is evaluating its position, and what role it can play in terms of education and engagement with aggregators, amongst others. Following updates on Basel, NBFI and UCITS, she left attendees with the progress the Association has made in developing markets, notably the KSA (look out for our imminent update on the changes to netting).
ISLA’s Tax Working Group Co-Chair Vladislav Urumov and Siamak Mostafavi then delved into the banking sector’s response to the new legislative measures of the 2025 French Finance Bill, from the complexities of the BOFIP to practical guidance on French Tax laws, and the significant implications on financial transactions for market participants.
Tom Spinner discussed the growth of the global securities lendable assets, surpassing $45 trillion with balances above $3.5 trillion since April 2025. However, the key takeaway from Tom’s in-depth market data analysis was a notable divergence in revenue drivers. While global equity revenues are robust, driven by US and Asian growth, European equity revenue is declining and French equities mirror this. Conversely, French government bond revenue expected to drive Eurozone fixed income revenue for the rest of 2025. Looking ahead to Q4 2025, this divergence is expected to continue.
ISLA’s Andrew Dyson, Mohammed Al Amine Quorrich, CFA, Johann Palychata and julien choukroun then closed proceedings with a review highlighting that the asset management market is increasingly viewing the activity as less ancillary and increasingly a liquidity management tool, and also noted that collateral mobility is critical across businesses and firms. Furthermore, and given the capital intensity around borrowing equities, the market is turning to Total Return Swaps (TRS) as a more capital-efficient method for balance sheet management. Whilst sustainability is still on the agenda as a focus for clients, panellists felt the differences between the US and Europe may mean that US Treasury Clearing is unlikely to become mandatory in Europe.
The panel also focused heavily on the future of market infrastructure. While the willingness and ambition to adopt disruptive technologies like tokenisation are strong, adoption is currently stalled by a number of reasons, including legal and regulatory clarity, associated technology risks, as well as the essential need for full market-wide commitment. In the near term, repo markets are exploring AI as a more immediate, practical solution for addressing day-to-day challenges around collateral and trading optimisation, positioning it as the most accessible technology for efficiency gains in the French securities lending landscape today.
