This time last year, buy-side repo users in the UK and Europe were panicking. A regulatory-driven year-end balance sheet clampdown from dealers in the bilateral market meant liquidity was scarce, and prices soared. For the first time, the buy side started to take the idea of clearing their trades seriously.
Twelve months later, things have completely turned around. Users says spreads on bilateral UK government bond repo are 12 basis points tighter, having declined progressively in every quarter