Treasury repos may hit 20bp under DTCC liquidity plan
The move to a committed liquidity facility at the DTCC's Ficc clearing house will place further strain on banks' balance sheets and may cause repo rates to more than double
A change to the way the Depository Trust & Clearing Corporation (DTCC) funds its fixed-income clearing service could push US Treasury repurchase agreement rates up to 20 basis points, warn market participants - more than double the current level.
The DTCC's Fixed Income Clearing Corporation (Ficc) subsidiary, which clears cash US Treasuries and repos between dealers, is seeking a $50 billion capped committed liquidity facility (CCLF) from its members to comply with new risk management standards
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