BELGIUM - Philip Neyt, the chairman of the Belgian Association of Pension Funds (BVPI), has called on Belgian corporate and industry-wide pension funds to stop the practice of lending securities.

Neyt told IPE his organisation has written a letter to all pension funds calling them to stop the practice of stock lending.

In the letter, the BPVI writes: "In the current context, the lending of securities is not prudent."

The organisation added in the case of any such lending, the fund should survey whether this can be stopped or which measures can be taken.

Neyt is particularly concerned funds may not know the parties to whom the securities are eventually loaned: "You don't know the quality of your collateral."

Neyt thinks especially during times of financial market turmoil pension funds serve as a "cushion for the entire financial system" because their long-term investment horizon means it does not make sense for them to aid parties who have a different interest entirely.

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