The latest set of European repo market figures published by the International Securities Market Association (Isma) reveal a downward movement in direct and brokered business in favour of an increase in dealing via automated trading systems (ATS).
In Isma's second bi-annual survey of the European repo market, 55 banks across Europe were asked to analyse their repo business in terms of type of counterparty, currency, type of contract, type of repo rate, remaining term to maturity, method of settlement and source of collateral. The study was conducted by the Isma Centre at the University of Reading in the United Kingdom.
Results of the survey reveal 44.7% of reported outstanding repo contracts had been negotiated directly with other counterparties, 40.1% through voice-brokers and 15.2% through inter-dealer automatic trading systems (ATS). These figures show contractions in the shares of direct business (down from 46.5% in June) and brokered business (down from 45.5%), but a jump in electronic trading (up from 8.1%).
Interestingly, while there was a fall in the value of outstanding repo contracts with domestic counterparties (down from 53.1% in June to 45.6% in December) and contracts with cross-border counterparties in the eurozone (down from 24.7% to 22.2%), there were substantial increases in the value of outstanding contracts with cross-border counterparties outside the eurozone (up from 17.5% to 23.6%) and contracts negotiated anonymously through an ATS and settled with a central clearing counterparty (up from 4.6% to 8.7%).
Isma's next European repo market survey is scheduled to take place on 12 June, 2002.