CalPERS, CalSTRS, Others Cut Lending

SAN FRANCISCO-Pension fund managers CalPERS, CalSTRS and NY Common have temporarily halted their lending of certain financial services securities so that they cannot be abused by short sellers. All three said the shares would be lent again when once the volatility ends.

The New York Common Retirement Fund, the most recent addition to the list, went the furthest, removing 105 million shares in 19 banks and lending companies from the pool of available securities under the Fund’s Securities Lending Program “so they can’t be used by short sellers.”

“The financial services industry has experienced declines in public equity values that in some cases are unconnected to the long-term financial health of the industry,” New York State Comptroller Thomas DiNapoli said in a statement. “By removing some of the fuel that is feeding this speculative fire, my action is intended to bring stability and rationality back to our equity markets.”