Who Participates in Cleared Repo?
Published: July 8, 2021
The U.S. repo market, which is split among four markets, links a wide range of banks and nonbanks who lend and borrow short-term against securities pledged as collateral. This brief uses the OFR’s collection of repo market data to highlight some basic facts about the two cleared repo markets. The broadness of cleared repo market participants underscores two increasingly important trends in U.S. financial markets. First, the rising importance of market-based finance among hedge funds and money market funds. Second, the global scope of U.S. financial markets, as a significant portion of net repo borrowing in cleared markets is by foreign banks. The diversity of institution types also means reference rates based on repo transactions represent a broad range of financial market participants. (Brief no. 21-01)