May 2, 2018 - LSTA’s Bridget Marsh and Tess Virmani were joined by Joe Dewey of Holland & Knight and Joshua Ashley Klayman of Morrison & Foerster when they presented on “Blockchain Technology Disrupting the Loan Market” at the World Bank in Washington DC.  All blockchains have certain traits in common; they are distributed in nature and have a mechanism for reaching consensus. Without one authoritative copy of a critical ledger maintained on a centralized database by a trusted third party, blockchains are maintained in a decentralised manner and the ledgers are replicated across computers (referred to as nodes) all connected to a common network.  Given privacy concerns and KYC/AML policy considerations, closed and permissioned ledgers definitely seem to be the favored approach in financial services.  Although focus in the loan market has been on how blockchain technology and smart contracts could speed up trade settlement times, many other areas of the loan market could also potentially benefit. For example, the periodic testing of a credit agreement’s financial covenants could be done far more efficiently if they were expressed in code, which would be possible if the financial data could be taken from a borrower’s financial reports and passed to a smart contract which then uses an agreed formula (previously coded in the smart contract) to determine automatically whether each covenant is met.  The unique features of this emerging technology could also help regulators, for they could quite easily monitor transactions taking place on the blockchain.  Although the technology is evolving and will likely look very different in five years, it is here, and the general consensus is that it will disrupt how the loan market currently functions.

Become a Member

Membership in the LSTA offers numerous benefits and opportunities. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction.

View Current Members

Our Partners

cusip-global-services-vector-logo.svgFitch Group logoRefinitiv-(March-2019)SP-Global-Market-Intelligence
Total Results: 

Sort by:

2020 Secondary Trading Executive Summary

LSTA secondary loan trading volume increased 4% to a record $772B in 2020. The COVID-19 induced price volatility of March went on to set the…

We Await LIBOR Announcements But Can Still Act Today

Once ICE Benchmark Administration’s (“IBA”) consultation on its intentions to cease the publication of LIBOR closes on Monday, their feedback statement could follow shortly thereafter.

Election News: New LSTA Board Inaugurated

n January 19, 2021, the LSTA held its Annual Member Meeting, electing its 2021 Board of Directors. The Board of Directors are a dedicated lot,…