Eurex Repo expands its inter-bank markets
10 February 2016 Frankfurt
Image: Shutterstock
Eurex Repo has expanded its inter-bank markets to address buy-side clients.
The Frankfurt-based service provider is seeking to separate itself from the anonymous inter-bank markets with customised buy-side trading licences that offer bilateral trading.
Banks and their buy-side clients will be able to continue their existing business relationships.
The first of two new products, Select Invest, will act as net cash providers to banks and the second, Select Finance, will provide access to secured funding and securities financing in one single trading and clearing permission.
Select Invest will operate by signing an agreement with a clearing agent who will provide transaction, cash and collateral management services.
Select Finance clients will have direct access to Eurex Clearing and will therefore need to fulfill all admission requirements.
If a bank concludes a cleared repo transaction with a corporate, the bank lowers its capital costs significantly by decreased risk weighted assets. The risk weighting can drop from between 20 and 100 percent to just 2 percent.
Both products are joint initiatives of Eurex Repo and Eurex Clearing.
The reduced capital requirements driven by exposure netting have positive effects on the leverage and net stable funding ratios, according to Eurex Repo.
The Frankfurt-based service provider is seeking to separate itself from the anonymous inter-bank markets with customised buy-side trading licences that offer bilateral trading.
Banks and their buy-side clients will be able to continue their existing business relationships.
The first of two new products, Select Invest, will act as net cash providers to banks and the second, Select Finance, will provide access to secured funding and securities financing in one single trading and clearing permission.
Select Invest will operate by signing an agreement with a clearing agent who will provide transaction, cash and collateral management services.
Select Finance clients will have direct access to Eurex Clearing and will therefore need to fulfill all admission requirements.
If a bank concludes a cleared repo transaction with a corporate, the bank lowers its capital costs significantly by decreased risk weighted assets. The risk weighting can drop from between 20 and 100 percent to just 2 percent.
Both products are joint initiatives of Eurex Repo and Eurex Clearing.
The reduced capital requirements driven by exposure netting have positive effects on the leverage and net stable funding ratios, according to Eurex Repo.
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