09 September 2008

ICMA: European repo market remains buoyant despite turbulent financial markets

"Despite continuing turbulence in the wholesale money markets, the survey demonstrates that the repo markets show remarkable resilience”, Godfried De Vidts, Chairman of ICMA’s European Repo Council said.

ICMA released the results of its 15th semi-annual survey of the European repo market. The consistent figure for market size shows that the European repo market has held up well in the recent turbulence and has not been subject to the same deleveraging that has been reported in other financial markets, such as complex structured finance and unsecured lending.

 

“Despite continuing turbulence in the wholesale money markets, the survey demonstrates that the repo markets show remarkable resilience”, Godfried De Vidts, Chairman of ICMA’s European Repo Council said. “Repo has become a key market tool employed by central banks around the world”, he added. The ongoing work of the industry on clearing and settlement, including Target 2 Securities and CCBM2 together with renewed competitiveness in our markets due to the implementation of MiFID bode well for the future growth of repo.”

 

Main findings of the survey were:

• The surge in the market share of business conducted through voice-brokers has been reversed.
• Levels of cross- border trading have recovered from the December 2007 survey, possibly indicating willingness to trade with a wider circle of counterparties.
• The growth in credit repo has continued despite difficult conditions.
• The increase in the share of the US dollar may be further evidence of some easing of strains.
• Market participants remain cautious and are looking for ways to control risk.

 

Press release

Survey

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