Inventory limits behind collapse in equity repo rates

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CLICK HERE TO VIEW THE ARTICLE IN FULL To an outsider, the implied equity index repo rate might sound like one of the quiet backwaters of the financial markets. In fact, it’s a key risk measure for exotic equity desks, and is closely watched by their delta-one cousins as a signal of a classic arbitrage opportunity. It has also been anything but quiet. In recent months, the rate has collapsed to unheard-of levels, which traders say is a sign the usual relationship between these two diffe