15 September 2010

CPSS publishes paper on strengthening clearing and settlement arrangements for repo markets

The report by the Comittee on Payment and Settlement System ( CPSS), first presents a comprehensive survey of the clearing and settlement arrangements for repos in selected CPSS member countries. In particular, it sheds light on the experience with these arrangements during the financial crisis and show that repo clearing and settlement arrangements vary considerably across countries and markets.

Nest , it identifies several issues related to clearing and settlement arrangements for repos that have the potential to affect the resilience of repo markets and outlines ways in which they can be addressed.

The report concludes that it is worthwhile for the stakeholders in each market to review how the clearing and settlement arrangements for repos could be further strengthened. As a first step, the report suggests that the providers of such arrangements in each country should, jointly with market participants, regulators and the central bank, attempt to develop a common view on the relevance of the identified issues for their market. As a second step, each provider could then evaluate which measure or combination of measures would be best suited to address the relevant issues in its specific circumstances

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