Triparty Repo: So Much Easier Than You Think

Pascal Morosini explains the growth in the triparty repo market

by Pascal Morosini, Executive Director, Global Head of GSF & Broker Dealer Sales and Relationship Management, Clearstream

Although they have a reputation for being complex, triparty repos are really not that complicated. They are one of the simplest forms of secured investments, and really just a bank deposit backed by assets which are independently held and managed.

The message appears to be getting across, judging by the growth in participation in the market. More and more corporates are joining the triparty repo market at Clearstream. Combined cash volumes are now above €25 bn and the number of corporate customers has grown every week since the launch of a new master contract which enables faster access to the market. More than 30 corporates are investing their cash regularly with banks against collateral using Clearstream’s Global Liquidity Hub: the market has almost tripled in terms of counterparties and volumes in the last two years. In response, Clearstream continues to adapt its products to cope with the demand, making trading easier and lowering the barriers to entry for corporate customers.

But why is there so much interest from the corporate world? The answer lies in the aftermath of the financial crisis, which left cash-rich corporates uncertain about how to invest their money, as unsecured money deposits no longer seemed such a safe option as concern over counterparty risk grew.

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