European Commission joins Eurex repo market
07 October 2024 Germany
Image: f11photo/stock.adobe.com
The European Commission (EC) has joined the Eurex Repo segment, saying it is ready to trade and clear repo transactions at Eurex.
This brings the number of participants to 165, including 10 supranational institutions and agencies, as well as five central banks such as Deutsche Bundesbank.
This is a “major milestone” for Eurex as both a major marketplace for derivatives and repo trading, and at the same time, one of the largest clearing houses globally, to become the incumbent marketplace for trading and clearing of euro-denominated repo and derivatives transactions.
It also delivers on the commission’s announcement from December 2022 to develop the market infrastructure for EU bonds by implementing a repo facility.
According to Eurex, it is a further milestone in improving the market infrastructure for EU bonds, which will support the use of EU bonds as collateral, as well as the overall liquidity of EU bonds in secondary markets.
The EC has selected Deutsche Bundesbank, the German central bank, as general clearing member.
Dr Joachim Nagel, president of Deutsche Bundesbank, comments: “Acting as a general clearing member at Eurex for several public entities for many years, the Bundesbank brings experience to the table.
“With this robust track record, we are happy to provide our services to the commission. I look forward to implementing our newly established partnership and the benefits it will bring to our financial system.”
Nagel, along with Johannes Hahn, European Commissioner for budget and administration, and Burkhard Balz, member of the executive board of Deutsche Bundesbank, attended the Bell Ringing ceremony on the trading floor of the Frankfurt Stock Exchange to welcome the European Commission as a market participant.
Hahn says: “The European Commission’s objective is to strengthen the European capital markets and ensure financial stability and their sovereignty. I am very happy that we joined Eurex Repo as a market participant. We need a liquid EU bond market and Eurex is a great partner to achieve it.”
Under its unified funding approach, the European Commission decided at the end of 2022 to create a liquid curve of large benchmark bonds, branded EU Bonds, rather than separately denominated bonds for individual programmes.
Since then, the commission developed the ecosystem for EU bonds further by implementing the European Issuance Service and quoting arrangements for electronic trading platforms.
The EU's total debt outstanding is currently at over €560 billion, making it the fifth largest issuer within the 27 member states.
The onboarding of the EU Commission demonstrates the substantial opportunities in European repo markets, says Eurex.
Erik Müller, CEO of Eurex Clearing, says: “We welcome the EU Commission and fully support its unified funding approach. We are proud to be the commission’s partner for trading and clearing of repo transactions in EU debt securities complementing our broad range of clients.”
This brings the number of participants to 165, including 10 supranational institutions and agencies, as well as five central banks such as Deutsche Bundesbank.
This is a “major milestone” for Eurex as both a major marketplace for derivatives and repo trading, and at the same time, one of the largest clearing houses globally, to become the incumbent marketplace for trading and clearing of euro-denominated repo and derivatives transactions.
It also delivers on the commission’s announcement from December 2022 to develop the market infrastructure for EU bonds by implementing a repo facility.
According to Eurex, it is a further milestone in improving the market infrastructure for EU bonds, which will support the use of EU bonds as collateral, as well as the overall liquidity of EU bonds in secondary markets.
The EC has selected Deutsche Bundesbank, the German central bank, as general clearing member.
Dr Joachim Nagel, president of Deutsche Bundesbank, comments: “Acting as a general clearing member at Eurex for several public entities for many years, the Bundesbank brings experience to the table.
“With this robust track record, we are happy to provide our services to the commission. I look forward to implementing our newly established partnership and the benefits it will bring to our financial system.”
Nagel, along with Johannes Hahn, European Commissioner for budget and administration, and Burkhard Balz, member of the executive board of Deutsche Bundesbank, attended the Bell Ringing ceremony on the trading floor of the Frankfurt Stock Exchange to welcome the European Commission as a market participant.
Hahn says: “The European Commission’s objective is to strengthen the European capital markets and ensure financial stability and their sovereignty. I am very happy that we joined Eurex Repo as a market participant. We need a liquid EU bond market and Eurex is a great partner to achieve it.”
Under its unified funding approach, the European Commission decided at the end of 2022 to create a liquid curve of large benchmark bonds, branded EU Bonds, rather than separately denominated bonds for individual programmes.
Since then, the commission developed the ecosystem for EU bonds further by implementing the European Issuance Service and quoting arrangements for electronic trading platforms.
The EU's total debt outstanding is currently at over €560 billion, making it the fifth largest issuer within the 27 member states.
The onboarding of the EU Commission demonstrates the substantial opportunities in European repo markets, says Eurex.
Erik Müller, CEO of Eurex Clearing, says: “We welcome the EU Commission and fully support its unified funding approach. We are proud to be the commission’s partner for trading and clearing of repo transactions in EU debt securities complementing our broad range of clients.”
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