Grim repo: clearing touted as saviour for shrinking market

CCPs wary of risks as they vie to launch buy-side repo services

grim-reaper-shutterstock-241810123
Grim shrinkage: repo market has contracted by 'up to 60%' in the US

The repo market is ill. Once the leverage ratio takes effect in 2018, banks operating matched books of borrowed and lent cash will be prevented from fully netting trades, and will be charged capital on a proportion of the total notional. The prospect has already caused the market to shrink by up to 60% in the US, according to one estimate.

There is an obvious cure: a comprehensive clearing solution that allows buy-side firms to join the incumbent banks, dramatically expanding their ability to

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: