SECURITIES LENDING & REPO MARKETS
A CACEIS PRODUCT DEVELOPMENT PUBLICATION - OCTOBER 2010
OVERVIEW OF THE SECURITIES FINANCING MARKETS
According to ICMA, the European repo market reached € € 5,582bn in December 2009 in terms of outstanding contracts. Despite its late start, the European repo market is now larger than its US equivalent. Figure 17 displays the evolution of the European market size between 2001 and 2009, with a bounce in December 2009 after a significant decrease at the end of 2008 in the middle of the financial crisis. The need to move to from unsecured lending to collateralised financing is the central driv- ing force of the repo market. The growing trend of the market is likely to continue unabated under Basel II.
Figure 17: European repo market size from 2001 to 2009
8000
7000
6,430 6,382
6000
5,883
5,582
5000
5,000
4,633
4000
In €bn
3,788
3,377
3000
2,298
2000
1000
0
December 2009
December 2008
December 2007
December 2006
December 2005
December 2004
December 2003
December 2002
December 2001
Source: 18th ICMA survey, March 2010
In terms of cash currency, a large majority of repos in Europe are in euro (65.6% as at De- cember 2009 according to ICMA’s survey), US dollar and pounds sterling coming well behind (see figure 18).
Figure 18: Cash currency analysis in the European repo market as at December 2009
JPY 2.7%
CHF 0.5%
OTHER 0.5%
DKK, SEK 2.4%
USD 15.9%
EUR 65.6%
GBP 12.3%
Source: 18th ICMA survey, March 2010
page 28 | Securities Lending & Repo markets
Made with FlippingBook Online newsletter