For some dealers, repo is now viewed as part of the collateral businesses and not an independent function. It can already be part of a broader business unit including Total Return Swaps (TRS) and collateral optimization, and repo desks may conduct TRS on a regular basis. We have seen equities derivatives financing account for a greater share of equity prime brokerage revenues than ever before. While there is no parallel massive takeover of TRS in the fixed income financing space, how far and how fast these products are overlapping is a trend worth watching.
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