Repo market coping with liquidity regulation for now – bankers

Efficiency gains have kept capital supply up, but challenges remain

European Central Bank at night
The ECB's QE could put pressure on collateral supplies

Repo markets have adapted to the liquidity squeeze imposed by new regulations including the liquidity coverage ratio (LCR), but there are more challenges ahead, participants at Euroclear's Collateral Conference said on May 18.

The LCR and the forthcoming net stable funding ratio have put pressure on repo markets, as much useful collateral – in particular sovereign bonds – is now held by banks to meet regulatory minimums.

But participants in a panel discussion, held under the Chatham House

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