A pilot survey of the Asia-Pacific repo market

□ Published by International Capital Market Association (ICMA)

□ Published on September 2017

□ Summary of the article:

The vast bulk of collateral was reversed in by repo desks located in Japan from counterparties in the domestic market and mainly repo-ed out cross-border to counterparties outside Asia. Collateral in the form of sovereign securities formed a larger share of the Asian market than the European market. The main currency traded in the Asia-Pacific repo market was Japanese yen, of which the reporting banks were net lenders. There was some cross-currency repo between US dollars and Japanese collateral. Most transactions were executed directly on the telephone and electronic messaging systems. The proportion of repos that was centrally cleared in Asia-Pacific was larger than in Europe but, in contrast, most Asian repos seem to have been executed directly, then registered post trade. Tri-party repo was very small. While most repos were short-dated, there was significant business with a remaining term of between one and three months, suggesting the trading of HQLA for regulatory purposes. Most Asia-Pacific repos took the form of repurchase transactions (classic repo) and were fixed-rate. There was very little floating-rate repo