Getting to grips with repo
Repos continue to play a major role in the world’s financial markets, especially in Europe and North America. They provide an efficient source of funding for banks and other financial intermediaries on the one hand, and a safe home for risk-averse cash institutional investors – both buy-side and corporates – on the other.
More corporate treasuries are entering the repo markets, albeit tentatively. They are attracted by the benefits that repos offer over traditional homes for short-term cash, such as bank term deposits and money market funds (MMFs).
However, the administrative and operational complexities of repos can be off-putting for the uninitiated. Using a triparty agent can remove these difficulties and provide valuable access to banking counterparties – increasing the opportunities to enter a repo.
Euroclear’s head of product solutions global markets, Olivier de Schaetzen, explains why the easiest and most efficient way to enter the repo market is through triparty repo.