Shining a light

Author: | Published: 11 Jul 2011

The Loan Market Association (LMA) released guidelines on transparency and the use of information on June 7.

While it only spanned three pages of text, its suggestion that loans should not be traded based on borrower confidential information – even if both parties have access to the same level of information – has angered many in the bank lending community.

The LMA guidelines on transparency and the use of information, released on June 7, note that "market participants should not trade on material information which has not been made available to the whole of the lending syndicate."

In the section on best practice, the LMA said "this applies even where the counterparty to that trade has access to the same level of borrower confidential information".

"It's a good start in terms of getting the issues on the table and working towards a solution which the markets will accept," said Clifford Atkins from...