FSB report finds no net change in repo positions of non-bank intermediaries

Global Monitoring Report on Non-Bank Financial Intermediation 2019

OFIs continue to be net providers of cash to the financial system through reverse repos, while banks remain net recipients of cash through repos as reflected by their net repo positions. OFIs’ net repo position, however, was little changed in 2018. Amongst OFIs, MMFs, trust companies, investment funds and SFVs are net providers of cash through repos, whereas broker-dealers, hedge funds and finance companies are net recipients. Banks’ repo assets saw a sharp increase in 2018, exceeding the growth in banks’ repo liabilities, mostly due to the UK and the US. Banks acted as net providers of cash through repos in some jurisdictions, the largest of which being the UK, Canada and the US, and net recipients in others, the largest of which being France and Japan.

The use of repos by banks has increased over the past few years, mostly in advanced economies. Total repo assets of banks grew by 21.2% in 2018 to reach $5.9 trillion, while their total repo liabilities grew by 15.0% to reach $6.0 trillion, with most growth in advanced economies. Similarly, OFIs’ repo liabilities have grown significantly since 2016, growing at 6.4% to $3.9 trillion in 2018, driven by the increasing use of repo as a source of funding by OFIs in the Americas.

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