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Repo market coping with liquidity regulation for now – bankers

Participants at Euroclear’s Collateral Conference say repo markets have delivered new efficiency gains to keep collateral supply up, but the outlook over the coming year looks less certain

European Central Bank at night
The ECB's QE could put pressure on collateral supplies

Repo markets have adapted to the liquidity squeeze imposed by new regulations including the liquidity coverage ratio (LCR), but there are more challenges ahead, participants at Euroclear's Collateral Conference said on May 18.

The LCR and the forthcoming net stable funding ratio have put pressure on repo markets, as much useful collateral – in particular sovereign bonds – is now held by banks to meet regulatory minimums.

But participants in a panel discussion, held under the Chatham House

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