The magnitude of US Treasury repo clearing for global systemically important banks (G-SIBs) cannot be overstated. Research from the Federal Reserve Bank of New York demonstrates that central clearing could reduce dealers’ gross settlement obligations by up to 70% during peak trading periods – this is an $800 billion daily reduction in balance sheet consumption. For G-SIBs constrained by leverage ratio requirements, this represents a quantum leap in capital efficiency and a fundamental recalibration of competitive advantage in the global financial system.
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