ICMA’s European Repo and Collateral Council (ERCC) and ASIFMA’s Secured Funding Markets Committee have released the results of a pilot survey of the Asia-Pacific repo market.
The main findings of the survey:
- Most collateral was reversed in by repo desks located in Japan from counterparties in the domestic market and mainly repo-ed out cross-border to counterparties outside Asia.
- Collateral in the form of sovereign securities formed a larger share of the Asian market than the European market (at least as measured in the surveys). The largest share of collateral was Japanese, but there was also a significant amount of US collateral.
- The main currency traded in the Asia-Pacific repo market was Japanese yen, of which the reporting banks were net lenders. There was some cross-currency repo between US dollars and Japanese collateral.
- Most transactions were executed directly on the telephone and electronic messaging systems. Voice-brokers were heavily involved in reverse repos from domestic counterparties. There was very little electronic trading.