On the first day of the International Capital Market Association (ICMA) conference, experts said they expect more to come from the repo market, and suggest that the market is in a stage of perpetual transformation. They also questioned repo’s future as a standalone product, highlighting that it is part of the broader financial ecosystem.
The panelists, moderated by Gareth Allen, managing director and global head of Investment and Execution and head of Repo Trading at UBS, discussed the question “Are we in the golden era of repo, or is the market still maturing?”, analyzing it through a product lens. The panel noted that different products are arising in different jurisdictions. For example, products in Asia are now diverging from the US and Europe, making global standardization a challenge.
In terms of capital, contributors highlighted that banks are constrained in terms of what they can do, but need to make sure they’re able to provide the necessary liquidity. Crucially, repo markets must function to shift the provision of liquidity towards those who really need it. The key issue is how much more regulation they’re able to bear.
Digitization was also a hot topic, including DLT, particularly on the post-trade side, with its potential to make processes more efficient. In 2030, panelists agreed that the repo market will look a lot more digital and inclusive, with bigger volumes that capture the entirety of the market.
The panel included Charlie Badran, head of AXA Financing at Axa Investment Managers, Amanda Butavand, head of Short Term Markets Sales Europe at Credit Agricole CIB, Sabine Farhat, head of Securities Finance Product Management at Murex and Michael Semaan, global head of LCH RepoClear at LSEG Post Trade.