Repo market coping with liquidity regulations for now, panellists say

Efficiency gains have kept capital supply up, but challenges remain

Euro sign, Frankfurt
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 today (May 18).

The LCR and 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 during a panel discussion, held under the Chatham House

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