Icap launches repo settlement facility to reduce counterparty risk

David Benyon
23 Mar 2009

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Operational risk

LONDON - Interdealer broker Icap has launched a new initiative to reduce counterparty risks in the Italian repurchase agreements (repo) market. The facility, on European electronic fixed-income platform BrokerTec, will allow pre-agreed repo trades to be sent to Italian settlement agents and the relevant central counterparty.

Icap says the service mitigates counterparty risk by allowing central counterparty access to Italian repos for market participants trading directly or via any voice broker. The service is available for all BrokerTec's straight-though processing (STP) participants signed to the central counterparty for Italian government bonds.

"Any move to improve the robustness of the repo market using where possible the services of a central counterparty will receive our full support," says Simon Parkins, global head of repo trading at BNP Paribas. "I am particularly pleased therefore that interventions through various industry discussions, including the European Repo Council, have resulted in such a timely and efficient solution to the requests of market participants."

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