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Eurex Repo, the electronic repo market of the international derivatives exchange Eurex, set several new records in 2007 following the internationalization of Euro GC Pooling with additional European collaterals in September 2007. On 7 December 2007, a new daily record was set with daily outstanding volume in Euro GC Pooling peaking at €31.7 billion, average outstanding volume in December 2007 rose by 156 percent to €22.8 billion. On a quarterly basis, the growth of volume was 76 percent, totaling €20.2 billion.
The average annual growth rate has totaled 65 percent since it was launched in March 2005. 21 Eurex Repo participants are currently active in this segment. Euro GC Pooling also enables the settlement of high-volume transactions, and has already processed individual transactions in excess of €10 billion.
Euro GC pooling is the first electronic market in Europe to enable cross-border liquidity management via a wide range of ECB-eligible collateral thanks to the STP link established in September 2007 between Clearstream Banking Frankfurt (CBF) and Clearstream Banking Luxembourg (CBL). All Clearstream customers can now manage more than 8,000 securities (Eurobonds and major European bonds) as collateral in Euro GC Pooling. This collateral basket can also be used as collateral for refinancing within the framework of ECB open market transactions.
Marcel Naas, Managing Director of Eurex Repo GmbH, said, “This extension of Euro GC Pooling has been proven to be extremely successful. This trend continues in 2008 with a new record on 4 January with €32.2 billion of daily outstanding volume. Our unique combination of collateralized money market trading with the efficiency of Eurex Clearing’s central counterparty has been widely accepted by market participants. Our offering highly facilitates our customers to actively manage their Euro liquidity.”
Stefan Lepp, Head of Global Securities Financing, Clearstream, added, “The rapid growth on Euro GC pooling confirms that Eurex and Clearstream have taken the right steps in providing their customers with a much larger collateral pool. For all financial institutions, managing collateral efficiently and in a centralized way has become increasingly important. Clearstream has taken a pioneering role in helping its clients to optimize the use of their collateral through Clearstream’s wide range of triparty collateral management offerings. Bridging liquidity fragmentation leading to a centralized collateral pool which is embedded in an open architecture environment is the key success factor within our offering.” For Clearstream’s Global Securities Financing services, which include triparty repo, securities lending and collateral management reached in 2007, a yearly average outstandings of €327.8 billion compared to €254.6 billion in 2006. Currently, outstanding volumes are €366 billion.
Altogether, Eurex Repo continued to grow in 2007: average outstanding volume of all repo market grew by 9 percent, totaling at €92 billion. The Euro repo market saw stronger growth during this period: daily outstanding volume peaked in December with more than €58 billion, overall average outstanding volume in 2007 grew by 13 percent to almost €47 billion; December figures outperforming the general growth with an increase of 39 percent.
Average outstanding volume on the CHF repo market totaled CHF 68 billion (€ 44 billion) in 2007. On the last day of 2007, a new peak was set with CHF100.7 billion, bringing the average outstanding volumes in December 2007 to CHF79.5 billion (plus 19 percent).
Eurex Repo (www.eurexrepo.com) ranks among the leading markets for electronic repo trading and operates the CHF and Euro Repo Markets. The Eurex CHF Repo Market was launched in 1999, and the Euro Repo Market followed in 2001. 180 participants from 9 countries are currently admitted to trading on Eurex’s repo markets. Eurex Repo is the only market in Europe to offer all of the advantages of electronic trading in combination with the anonymity of the central counterparty Eurex Clearing AG and Clearstream Banking’s centralized collateral management system. Eurex Repo is a 100% subsidiary of Eurex. Repo trading allows banks to lend/borrow their security holdings in exchange for money and receive or grant liquidity as a result. The ECB and the majority of national European central banks use repo transactions to control money supply.
Clearstream (www.clearstream.com) is an International Securities Depository and the post trade arm of Deutsche Börse Group. It offers settlement and custody services as well as collateral management tools through its Global Securities Financing services. The combined services include triparty repo, securities lending and collateral management.
