Funding and Collateral Solutions

Centrally Cleared Repo Market Brief

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

February 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:

•    Funding pressures ultimately did not materialize over year end as adequate funding was available in the market
•    Sponsored repo balances peaked in Q4 at a high of $431B - skewed in favor of cash lenders who made up 62% of the balance
•    Despite Money Market outflows of $107B on the quarter, sponsored repo saw a $55B increase in cash lender balances
•    GSE dominance in the repo market was a heavy theme of Q4 but should start taper in Q1 of 2021

FICC Sponsored Volume (US$B)