Quotation Steininger, Lea, Lambert, Claudia, Jakovicka, Julija, Nicoloso, Pascal, Wedow, Michael, Grill, Michael. 2017. Recent developments in euro area repo markets, regulatory reforms and their impact on repo market functioning. Frankfurt/Main:European Central Bank.


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Abstract

Effectively functioning repo markets are of key importance for both financial stability and monetary policy, but the excessive use of repos may also be a source of systemic risk as witnessed during the recent financial crisis. Regulatory reforms introduced since the start of the crisis have aimed to contain systemic risk related to the excessive build-up of leverage and unstable funding, but recently some concerns have been raised about their potential effects on the functioning of the repo market. This special feature presents new evidence on the drivers of banks’ activity in the repo market with respect to regulatory reforms. In addition, it takes a closer look at the repo market structure and pricing dynamics, in particular around banks’ balance sheet reporting dates. While the observed volatility around reporting dates suggests that the calculation methodology for some regulatory metrics should be reviewed, overall, the findings indicate that unintended consequences of regulatory reforms on the provision of repo services by euro area banks have not been material.

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Publication's profile

Status of publication Published
Affiliation External
Type of publication Research report, expert opinion
Language English
Title Recent developments in euro area repo markets, regulatory reforms and their impact on repo market functioning
Location Frankfurt/Main
Academic institution European Central Bank
Year 2017
URL https://www.ecb.europa.eu/pub/pdf/fsr/art/ecb.fsrart201711_03.en.pdf

Associations

People
Steininger, Lea (Details)
External
Grill, Michael (ECB, Germany)
Jakovicka, Julija (ECB, Germany)
Lambert, Claudia (ECB, Germany)
Nicoloso, Pascal (ECB, Germany)
Wedow, Michael (ECB, Germany)
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