Funding and Collateral Solutions

Centrally Cleared Repo Market Brief

A quarterly update on the developments in the centrally cleared sponsored repo market

July 2021

Through innovative and flexible cash investment and financing solutions, we provide both our custody and third-party clients access to the Fixed Income Clearing Corporation (FICC) sponsored repo platform.

Given the interconnectivity between repo markets, monetary policy and macroeconomic trends, we want to help you stay up to date on what’s happening in the market with a specific focus on the rapidly growing sponsored segment. With views on recent market trends and what to expect in the future, our quarterly briefs give you the insight you need to unlock the benefits of centrally cleared repo.

Highlights from this quarter:

•    Market moving themes in Q2 continued to be focused around excess cash piled up in the short-term markets
•    FICC sponsored cash provider balances saw a $60B decrease on the quarter as rates were pinned at zero and collateral was scarce
•    The RRP saw a meteoric rise to $990B as the quarter came to a close with 90 counterparties using the facility
•    Despite the Fed hiking the rate on IOER and the RRP, the money markets are still faced with a massive mismatch of demand and supply for short term assets