Eurex Clearing | Eurex Repo
Next to pioneering and growing the cleared Repo business for pension funds and asset managers, the program aims to grow Repo transactions in the interbank market for European government bonds at Eurex. Repos are secured money market instruments through which banks meet their short-term liquidity requirements by depositing securities. The Repo market is an important element in the money market cycle between banks, central banks and investors.
So far, a significant part of the cleared European government bond Repo business takes place in the U.K. Shifting parts of this business to Eurex supports market participants in managing regulatory uncertainty and potential requirements post Brexit. It allows institutions to benefit from TARGET2-Securities, the pan-European platform that allows for real-time settlement in central bank money. Most importantly, market participants benefit from lower balance sheet utilization as they can leverage Eurex’s unique netting features across Special, GC (General Collateral) and GC Pooling Repo transactions.
Matthias Graulich, Member of the Eurex Clearing Executive Board: “We do all we can to support our customers to ensure a smooth transition to a post Brexit world. Therefore, we are very pleased that the extension of our Partnership Program to the Repo segment meets the market needs and we thank all our design partners.”
The design of the program extension to the Repo segment builds on the Partnership Program in the OTC interest rate derivatives area. Eurex shares a significant portion of the economic success as well as participation in its governance.
Peter Fejfer Nielsen, Head of EMEA Finance Desk, Citigroup: “As a design partner of the Eurex Partnership Program, we highly appreciate the inclusion of Repo as it offers us an additional alternative to clear our EUR-denominated Repos.”
Inga Johal, Head of Group Treasury, Commerzbank: “Continued high demand for HQLA collateral combined with a concentration of settlement in Europe requires strong sources of market liquidity. The linkage between custody, triparty, CCP and electronic trading are key to achieve this high degree of market efficiency. Commerzbank as a key driver of digital innovation joint the Eurex Partnership Program Repo in order to ensure operational readiness towards the next level of Liquidity/HQLA management."
Michael Cyrus, Head of Collateral Trading and FX, DekaBank: “As one of the leading Repo houses in Germany, we welcome Eurex’s Partnership Program to offer an alternative solution for trading and clearing of our EUR-denominated Repos within the EU27.”
Nicola Danese, Head of EMEA FI Financing, J.P. Morgan: “The new enhancements to Eurex Repo aim to increase the balance sheet netting opportunities and optimize margin requirements for Clearing Members. As one of the first members of the Eurex Clearing Partnership Program, we welcome this initiative and the exciting development for the industry.”
Lars Stridde, Head of Securities Financing, Landesbank Baden- Württemberg (LBBW): “With this initiative, Eurex Repo together with Eurex Clearing offers us an alternative for clearing European government bonds and in particular Bund-Repos via Eurex Clearing. Furthermore, it helps to manage our balance sheet with more netting opportunities.”
The complete list of participants in the Repo Partnership Program can be found here.
About Eurex Repo
Eurex Repo operates three markets for secured funding and financing with direct links to Eurex Clearing: GC Pooling, Repo and SecLend. The Eurex Repo services are fully integrated into Eurex's Euro trading and clearing product range.
About Eurex Clearing
Eurex Clearing is one of the leading central counterparties globally — assuring the safety and integrity of markets while providing innovation in risk management, clearing technology and client asset protection. Eurex Clearing serves about 200 Clearing Members in 20 countries, managing a collateral pool of EUR 46 billion and clearing trades valued at EUR 23 trillion (double counted) every month.