Risk.net: Buy-siders weigh virtues of P2P repo

Buy-siders are looking closely at peer-to-peer repo trading platforms as an alternative to bank-facilitated repo, which has come under strain in recent years due to regulation.

Elixium, the first peer-to-peer repo trading platform, is live and gaining interest from buy-side firms concerned about rising costs and shrinking capacity in repo markets. BNY Mellon is working towards launching a similar platform.

Doubts remain, though, about the long-term role of P2P given differences in the periods over which different buy-side firms typically wish to trade.

The documentation required to trade with multiple counterparties, and counterparty risk, are also cited as barriers to platforms playing a big role in the future.

“Smaller firms risk stepping into the wrong sort of trades, accepting poor collateral unknowingly or lending to companies that are in too bad a shape,” says one buy-sider.

The full article is available here.

Related Posts

Previous Post
FSB publishes “Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities” including securities lending
Next Post
US House passes SEC Regulatory Accountability Act to slow down rule making

Fill out this field
Fill out this field
Please enter a valid email address.


Reset password

Create an account