State Street executes centrally cleared repo trades on Eurex
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State Street executes centrally cleared repo trades on Eurex 10 May 2023Germany Reporter: Carmella Haswell
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State Street has selected Eurex as its first clearing house outside of the US to trade and centrally clear repo transactions.
The first transactions have now been executed on Eurex through State Street鈥檚 Munich-based subsidiary State Street Bank International (SSBI).
State Street says the power of multilateral netting aims to provide tangible risk management and collateral optimisation benefits to its client base. Through its Eurex membership, State Street intends to expand its European franchise and service offering.
Eurex鈥檚 liquid and centrally cleared repo markets allow clients to trade repos with more than 160 registered participants, including commercial and central banks, as well as government financing agencies and a range of supranational organisations.
The platform aims to help market participants to raise or place cash efficiently and securely against more than 13,000 domestic and international securities.
With the current market environment of increasing interest rates, targeted longer-term refinancing operations (TLTRO) repayments, and further reduction of excess liquidity, Eurex has observed a 鈥渟ignificant increase鈥� in trading activities and has reached new record volumes in its cleared repo markets.
During the first four months of 2023, Eurex鈥檚 total traded volume across all markets increased by around 120 per cent compared to the same period in 2022, driven by a 37 per cent YoY rise in traded volume in the repo market and an estimated 340 per cent YoY increase in GC Pooling, according to Eurex.
Frank Gast, member of the management board of Eurex Repo, says: 鈥淲e welcome State Street Bank International as a trading and clearing member of Eurex Repo and Eurex Clearing. The opportunities in the European repo market are immense and Eurex is excited to facilitate SSBI鈥檚 growth with our centrally cleared and innovative offerings.鈥�
Travis Keltner, global head of repo and alternative financing solutions at State Street, adds: "Eurex's ample access to stable market liquidity significantly enhances State Street's liquidity tool kit.
鈥淲ith this membership, State Street can build upon the launch of this Eurex clearing foundation to further support our clients鈥� needs, especially in capital efficient trading and clearing.鈥�
Simona Stoytchkova, member of the executive management board and head of global markets division SSBI, comments: 鈥淲e are thrilled about the exciting opportunities our new trading and clearing membership on Eurex Repo and Eurex Clearing will bring. The demand on European repos is immense, and this important milestone in State Street鈥檚 growth journey in Continental Europe enables us to better serve our local balance sheet and clients in the future.鈥�
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