Eurex Scores Two New Cleared Repo Participants
Posted by Colin Lambert. Last updated: September 25, 2023
Deutsche Börse’s Eurex has had BNY Mellon select it as the bank’s first repo clearing house outside the US and added a fifth central bank to the repo clearing service, meaning, the firm says, more than 160 counterparties are now registered with it.
Eurex says that with the current market environment, TLTRO repayments, and the further reduction of excess liquidity, it is seeing a “significant increase” in trading activities, which has seen it hit new record volumes in its cleared repo markets.
The total traded repo volume on Eurex across all markets has doubled this year (January to August 2023) compared to the same period in 2022. GC Pooling rose by 270% and the repo market by around 30%. Average daily term-adjusted trading volume (single counted) also reached record levels of about EUR 340 billion which is an increase of more than 70% compared to same period last year. Looking only at the buy side, total traded repo volume increased 265% year-on-year during the same period., Eurex adds.
This is reinforced by Björn Storim, CEO of BNY Mellon’s European bank, who observes, “Access to Eurex enhances our overall liquidity management tool kit. The demand for European repo is continuously increasing and this important milestone supports us in expanding our business and risk management capabilities in Europe.”
Meanwhile, Danmarks Nationalbank has become the first Nordic, and fifth global, central bank to clear its repo transactions. Martin Wagner Toftdahl, head of banking and markets at the Danish central bank, says, “Joining centrally cleared repo markets is an important milestone in our reserve management. First and foremost, centrally cleared repo transactions are perfectly in line with our aim of having broad market access and ensuring efficient management across products. Having access to liquid markets for cleared repos will further strengthen our ability to achieve underlying demand for our euro liquidity.”