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Repo survey
25 June 2008
?Competition in secured financing and repo has become fiercer than ever over the past year. As the results of the market's leading repo survey are revealed, Marek Sanders looks at who is the best, why they're the best, and how to price and sell collateral in an illiquid market.
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A perfect financial storm
The crisis and the subsequent changed market environment have certainly brought the fixed income repo market into the limelight as banks across the world flee from unsecured financing to the security of collateralised borrowing.
But it's a market that has also been shaken by a combination of falling balance sheets, dropping leverage and mounting pressures for banks to raise capital. While redemptions are increasing, as are haircuts, all amidst falling underlying asset prices and the overshadowing problem of having to price collateral when there's no market to do so.
There's no doubt about it, fixed income financing has become a tough and tricky market – good for revenues while spreads are high despite falling balance sheets – but still a real acid test to the strength of a repo desk's quality of service and counterparty relationships.
That's why the results of this year's global repo survey,...
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