The Need for Repo Clearing
by Nigel de Jong, Head of Sales & Relationship Management, RepoClear
Over the past year or so, it has become evident that repo clearing is essential for achieving efficiency in all market conditions. This is reflected in the growing demand for cleared repo, which, according to EU SFTR data included in the latest ICMA European repo survey, represents around 50% of outstanding loan value of the overall repo market, a trend fuelled in part by concerns highlighted during the COVID-19-driven volatility around access to safe and secure funding. This was especially acute in March 2020, when liquidity was at a premium and secured funding was in demand.
As a result of these stresses, some buy-side firms struggled to access secured repo markets and started to review their toolbox of execution options for when such a crisis repeats itself. This highlighted the ongoing need for repo clearing, not just as a safety net for difficult times, but as a mechanism for achieving better pricing and adequate capacity in both volatile and calm markets.
The full article is available at https://www.globalinvestorgroup.com/articles/3696730/the-need-for-repo-clearing