Lack of buy-side repo backstop a concern – Citi repo head

Growth of client repo books could create liquidity crunch, says Grigorios Markouizos

euro-liquidity-warning

With buy-side repo books swelling in recent years, a senior Citi executive has expressed concern about the lack of a liquidity backstop to help these entities in times of stress.

The buy side is making more use of repo due to regulation-driven hikes in the cost of unsecured borrowing, and growing demand for collateral to post as margin on derivatives transactions.

While the post-crisis framework has created mechanisms to shore up a dealer in a liquidity squeeze, the lack of a similar system

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