Eurex Launches Euro-Repo Platform - Complete Fixed-Income Product Line With Futures, Bonds And Repos - Eight International Banks Provide For Liquidity In Euro-Repo Trading

Eurex, the international exchange organization, is offering a new segment in its electronic repo market. Since Monday, euro-repos have been trading on the Eurex Repo platform with German government bonds and jumbo Pfandbrief issues as general collateral for secured fund raising and special repos for the lending and borrowing of specific securities with terms ranging from of 1 to 365 days.

After the successful establishment of the repo market in Swiss francs, Eurex is targeting the word's second-largest repo market after the U.S. dollar market by introducing euro-repos. The volume and role of repo trading has been growing steadily for years. Collateralized financing business through repos is increasingly squeezing out unsecured money-market transactions. Eurex is supporting this development with the new pan-European repo market.

Eurex-Repo rounds off the Eurex fixed-income strategy in terms of instruments, terms and services. Eurex CEO Rudolf Ferscha said in Frankfurt on Monday that "Eurex now offers the entire range of products, from cash trading to futures and repos with terms of one day to 30 years. Eurex is, moreover, the only exchange organization that also offers all clearing services for the whole fixed-income segment in addition to trading."

Eurex Repo benefits from the services of Eurex Clearing AG, which functions as the central counterparty for the buyer and the seller, thus assuming the obligation for fulfillment of all transactions. The main component of Euro-Repo trading is the so-called overnight business with a term of one trading day, which Eurex is the first to offer in an electronic repo market.

When Euro-Repo trading is launched, eight banks will provide for high liquidity: Bayerische Landesbank, Munich; Commerzbank, Frankfurt; CSFB, Zurich, Deutsche Bank, Frankfurt; DG Bank, Frankfurt; Dresdner Kleinwort Wasserstein, Frankfurt; HypoVereinsbank, Munich; and Westdeutsche Landesbank, Dusseldorf. Eurex Repo is open to all financial institutions that meet the conditions for admission to trading and clearing.

The bulk of the repo business, in which securities are sold for immediate delivery and simultaneous repurchase at a pre-determined time in the future, has been conducted over the phone up to now. The Eurex Repo platform, which has already been successful in the Swiss franc repo market since June 1999 with over 100 participating banks, is based on modern Internet technology, which facilitates handling and access for participants.