Funding and Collateral Solutions

Centrally Cleared Repo Market Brief

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

December 2020

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:

•    Risk-on tones across the market led to $251 billion in outflows from Government and Prime Money Market Funds in Q3
•    Despite these outflows, Sponsored Repo regained market share as sponsored cash balances finished 39 percent higher quarter over quarter
•    Repo has remained a competitive investment option as US Treasury Bills have richened with the $41 billion in net paydowns that hit the market this quarter
•    The lasting question in short-term markets is what will happen to the US$1.7 trillion sitting in the Treasury General Account at the Fed?

FICC Sponsored Volume (US$B)