European repo contracts outstanding value up 7.1% YoY, ICMA finds
13 November 2024 Europe
Image: auris/stock.adobe.com
The total value of European repo contracts outstanding has grown by 7.1 per cent year-on-year (YoY), the International Capital Market Association’s (ICMA) survey has found.
ICMA’s European Repo and Collateral Council (ERCC) has released the results of its 47th semi-annual survey of the European repo market, analysing the value of outstanding repo and reverse repo of 61 participants in June 2024.
The total value of the repo contracts outstanding on the books of those who contributed reached a new record high of €11,114 billion, compared to €10,899 billion in the December 2023 survey.
The net reverse repo position of the survey sample remained large, but it continued to recede, says ICMA, possibly in response to the increased supply of securities resulting from quantitative tightening and heavy issuance.
The association adds: “The reduced need to borrow specific securities may also account for further contraction in the share of automatic trading systems (ATS). A smaller share for trading on ATS was reflected in a smaller share for CCP-clearing.”
The share of ATS business within the eurozone sustained its rise into 2024 thanks to general collateral financing, the survey shows.
In contrast, automated trading platforms supporting dealer-to-customer repo continued to show strong growth in the survey, largely on the back of the hedge fund business.
While the share of US Treasuries continued to grow, French and German government bonds experienced a decline due to heavy issuance and political uncertainty.
EU-issued securities accounted for nearly 7 per cent of triparty repo, with haircuts being relaxed across the board.
The growth in the share of floating-rate repo continued in the first half of 2024, according to the survey, despite a change in the direction of monetary policy by many central banks.
ICMA’s European Repo and Collateral Council (ERCC) has released the results of its 47th semi-annual survey of the European repo market, analysing the value of outstanding repo and reverse repo of 61 participants in June 2024.
The total value of the repo contracts outstanding on the books of those who contributed reached a new record high of €11,114 billion, compared to €10,899 billion in the December 2023 survey.
The net reverse repo position of the survey sample remained large, but it continued to recede, says ICMA, possibly in response to the increased supply of securities resulting from quantitative tightening and heavy issuance.
The association adds: “The reduced need to borrow specific securities may also account for further contraction in the share of automatic trading systems (ATS). A smaller share for trading on ATS was reflected in a smaller share for CCP-clearing.”
The share of ATS business within the eurozone sustained its rise into 2024 thanks to general collateral financing, the survey shows.
In contrast, automated trading platforms supporting dealer-to-customer repo continued to show strong growth in the survey, largely on the back of the hedge fund business.
While the share of US Treasuries continued to grow, French and German government bonds experienced a decline due to heavy issuance and political uncertainty.
EU-issued securities accounted for nearly 7 per cent of triparty repo, with haircuts being relaxed across the board.
The growth in the share of floating-rate repo continued in the first half of 2024, according to the survey, despite a change in the direction of monetary policy by many central banks.
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