The Bank of England’s working paper “The potential impact of broader central clearing on dealer balance sheet capacity: a case study of UK gilt and gilt repo markets,” has explored the impact of increased clearing of UK gilt repo as a way to expand balance sheet capacity. This shows UK policy interest in repo clearing and follows the US Securities and Exchange Commission’s (SEC) proposal for mandated US Treasury repo clearing. For repo market participants in Europe however, a mandate for repo clearing would not be welcome.
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