Category Archives: International repo market

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Mini-panic hits repos backed by Irish bonds

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LCH.Clearnet, a London-based clearinghouse for financial transactions, said November 10 that borrowers on the repurchase market who used Irish bonds as collateral would have to deposit an extra 15 percent of the transaction in cash to protect the clearinghouse from … Continue reading

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Traders fear shortage of repo collateral in Europe

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Traders in Europe are worrying about a shortgage of repo collateral in the future, reports Financial News October 25. Currently, the large number of bonds being issued by governments is filling the need, but less government spending in the future, … Continue reading

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Tett: Silence on repo reform is “shocking”

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On the second anniversary of the collapse of Lehman Brothers, forced into insolvency by its repo lenders demanding more collateral or refusing to renew their loans, little has been done to reform the repurchase market, writes Gillian Tett, U.S. managing … Continue reading

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European repurchase market hits record trading volume

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The European repurchase market, which is considered vital to the functioning of the financial markets, hit record trading volumes in June, the Financial Times reported September 15. The value of the repo market was up 25 percent, to €7 trillion … Continue reading

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FT: Seoul is building a repurchase market

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Seoul is quietly building a repurchase market, reported the Financial Times’s Seoul bureau chief September 12. Korean financial institutions fund each other with short-term unsecured loans in a call market 51 percent of the time, the Financial Times reported. Only … Continue reading

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European repo lenders accept Spanish bonds as collateral

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International banks have used a record amount of Spanish government bonds as collateral for repo loans, the Financial Times reported August. 26. Repurchase agreements are the key area for bank funding in Europe, write reporters David Oakley in London and … Continue reading

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Re-use of collateral is major tool for leveraged finance

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Rehypothecation helps explain rapid bank growth in the years leading up to the financial crsis of 2007-2008 and even faster bank deflation since, according to a July 2010 study by International Monetary Fund senior economist Manmohan Singh. Specifics are hard … Continue reading

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European repo dealers endorse repurchase market

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The European Repo Council, which draws its members from the European repo dealer community, has published a ringing endorsement of the repurchase market. Even though the panic of 2007 and 2008 occurred mainly on the repurchase market, the council says … Continue reading

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ECB director: Collateralized financing with repos is the future

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The key developments in banking in the past 30 years are the rise of securitization and collateralized finance, primarily repurchase agreements, according to Lorenzo Bini Smaghi, a member of the executive board of the European Central Bank, speaking at the … Continue reading

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South Korea on track to develop repurchase market

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South Korea, Asia’s fourth-biggest economy, is seeking to become an advanced financial market, and that includes developing a repurchase market, the Financial Times reported November 24. Seoul said last week is planned to allow short selling of bonds next year … Continue reading

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Economists make rare estimate of repo volumes

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Basel economists have found repo markets were much more tumultuous in the U.S. than in Europe during the financial crisis of 2007 and 2008, according to a December 2008 study. This study is important because it makes a rare effort … Continue reading

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Repo goes from boring to hip

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Back in February 1997 repos were going “global and hip,” according to DerivativesStrategy.com, an online publication that covered the derivatives market from 1992 to 2001. Bloomberg screens had started carrying repo prices, repo markets were opening around the world, and … Continue reading