Euronext’s Yama Darriet, head of OTC capture and Repo Expansion Initiative, derivatives and post-trade, discusses the firm’s major step forward in strengthening collateral management and repo clearing capabilities across Europe.
With European capital markets in flux, collateral efficiency and robust repo clearing have never been more critical. The latest International Capital Market Association (ICMA) European Repo Market Survey (Number 48), conducted on 11 December 2024 and published in April 2025, reports that outstanding repo and reverse repo volumes fell to €10,860 billion—a 2.3 per cent decline from June 2024 and the first contraction since mid-2020.
At the same time, the survey showed a slight convergence of outstanding reverse repo vs repo balances, underscoring how European Central Bank (ECB) quantitative-tightening measures and the repayment of targeted longer-term refinancing operations (TLTROs) are expanding available collateral pools and normalising repo rates.
Additionally, the ICMA survey data showed, that against this backdrop of shrinking volumes, electronification patterns are shifting; Voice and bilateral-brokered trades are regaining market share even as dealer-to-customer platforms continue to grow.
Cross-border US dollar (USD) transactions are surging, US Treasury securities (USTs) now dominate collateral pools at record levels, and haircut dynamics are evolving—asset-backed securities (ABS) and financial-corporate haircuts have increased, while covered bonds and mortgage-backed securities (MBS) have seen some relief.
Meanwhile, regulatory reforms—from the European Market Infrastructure Regulation (EMIR) Refit in Europe to the US Securities and Exchange Commission (SEC)’s delayed US Treasury-clearing mandate—are driving firms to rethink collateral workflows and reporting infrastructure.
In the US, as noted previously, the SEC has recently extended the compliance deadlines for new regulations requiring certain US Treasury and repo transactions to be centrally cleared. Reuters reported that, originally set to be phased in by June 2026, the deadlines have been pushed back by a year to 2027 following concerns from US trade associations about possible market disruption. This extension provides firms with additional time to adapt and ensure operational readiness for the new clearing requirements, Reuters reporting concluded.
While Europe does not yet have a similar mandate for central clearing of repo transactions, the developments in the US have sparked discussions among European market participants, a recent risk.net article reported. Notably, the Bank of England (BoE) is actively exploring the potential benefits of mandating central clearing for repo transactions on UK Gilts (UK government bonds), though no formal decision has been made.
According to Risk.net, the BoE has been assessing the implications of such a mandate, particularly considering lessons learned from the 2022 Liability-Driven Investment (LDI) crisis and its recent system-wide exploratory scenario (SWES) stress test. This test revealed that during periods of market stress, banks tend to withdraw from repo markets, limiting liquidity precisely when buy-side firms need it most. Central clearing could mitigate these risks by reducing counterparty credit exposures and enhancing market resilience.
Although the BoE has not yet confirmed its plans, Governor Andrew Bailey has acknowledged that improving financial infrastructure — for example, expanding clearing for Gilt repo — could be a viable policy response to vulnerabilities in the market.
Similarly, discussions are emerging in the European Union regarding a possible government bond clearing mandate, reflecting a broader regulatory trend inspired by US reforms, risk.net’s reporting concluded.
Euronext’s strategic response: Enhancing repo clearing and collateral management
In response to these evolving trends, Euronext is committed to delivering innovative clearing and collateral management solutions that enhance market efficiency and liquidity — not just for repo, but across all asset classes.
A key development in this strategy is Euronext’s recently announced collaboration with Euroclear, its first of several strategic alliances with Tri-party agents (TPAs).
On 11 February 2025, Euronext confirmed the alliance with Euroclear to strengthen its collateral management services. This alliance, and future similar collaborations, will enhance Euronext Clearing by providing clients with automated and adaptable collateral services.
Anthony Attia, Global Head of Derivatives and Post-Trade at Euronext, said of the announcement: “This partnership marks a significant milestone in Euronext’s “Innovate for Growth 2027” strategy, reinforcing Euronext Clearing’s role as a cornerstone of the group's broader strategic ambitions.
It demonstrates our commitment to delivering best-in-class clearing and collateral management solutions for our clients. It is a key milestone in the expansion across Europe of Euronext Clearing’s repo franchise. As we develop Euronext Clearing’s services, we are creating value for stakeholders and positioning Euronext at the forefront of innovation in clearing and collateral management."
Through these TPA collaborations, firms, such as Euroclear, manage the selection, valuation, and substitution of collateral, ensuring compliance with eligibility standards while optimising operational efficiency.
Expansion of repo clearing services
The Euroclear collaboration is a key enabler of Euronext’s upcoming Repo Expansion Initiative; a phased-approach expansion of its repo clearing services; building on the 25-year strong foundation and expertise, where Euronext has been the trusted home of Italian repo clearing. The first phase — the Repo Foundation — is scheduled to launch in June 2025.
This enhanced offering is designed to attract international counterparties and expand Euronext’s repo clearing operations beyond Italy; covering a broader range of European government bonds, including Spanish, Portuguese, and Irish govies in June 2025, followed by German, French, Dutch, Belgium, and Euro-denominated in September 2025. Austrian and Finnish will follow by December 2025.
The Repo Expansion Initiative marks an important milestone in Euronext Clearing’s broader transition from an Italian-focused CCP to a pan-European cross-asset clearing house with membership solutions for both sell and buy-side firms. By providing clearing services across multiple markets and asset classes, Euronext is reinforcing its role in supporting liquidity, collateral efficiency, and risk management across European fixed income and repo markets.
Additionally, this initiative aligns with Euronext’s wider market infrastructure, including the addition of the MTS trading platform; now part of the Euronext group after the acquisition of Borsa Italiana. Notably, repo trading at Euronext, through the MTS trading platform, now sees volumes exceeding 180 billion EUR a day*.
*Internal MTS data accurate as of April 2025.
For more details on the Repo Expansion Initiative, click here.
Market Trends and Regulatory Developments
The Euronext collaborations and the Repo Expansion Initiative coincide with a period of structural change in the European repo market. As the European Central Bank (ECB) ceases reinvestments of maturing bonds from its monetary policy portfolios from January 2025—equivalent to approximately €40 billion per month—the market is undergoing a substantial withdrawal of central bank-provided liquidity.
A Securities Finance Times article highlights a marked resurgence in cash-driven and triparty repo activity. Average daily term-adjusted repo volumes rose by 70% in 2023, increasing from €210.3 billion to €357.8 billion. Over the same period, general collateral and special repo segments expanded by 142% and 38% year-on-year, respectively.
However, growth has moderated in 2024, with a slowdown in overall volumes and a contraction in activity in some segments, reflecting changing collateral dynamics and reduced scarcity in certain sovereign bonds.
At the same time, triparty repo activity has continued to build momentum. As the ECB’s TLTRO III facility winds down, market participants have sought alternative funding sources. This has led to a rise in uncleared triparty repo transactions, with banks re-entering the lending space, corporates increasing their participation, and buy-side firms actively seeking returns through repo markets.
These shifts underscore the growing importance of netting efficiency and collateral optimisation—particularly as spreads between core and peripheral eurozone repo rates continue to compress to historic lows. The full findings are detailed in the April 2025 repo market analysis published in the latest ICMA European Repo Market Survey.
Conclusion
Euronext’s Repo Expansion Initiative marks a major step forward in strengthening collateral management and repo clearing capabilities across Europe. By expanding access to cleared repo markets and reinforcing cross-border infrastructure, Euronext is helping market participants adapt to a rapidly evolving regulatory and liquidity environment.
Findings from the latest ICMA European Repo Market Survey indicate a contraction in outstanding volumes—reflecting the impact of central bank balance sheet reductions and seasonal balance sheet adjustments. Notably, net reverse-repo positioning has dropped to its lowest share of market activity in years, underscoring the importance of efficient collateral reuse and robust clearing solutions.
Looking ahead, repo desks should prepare for ongoing changes in collateral availability amid sustained sovereign issuance and quantitative tightening. Diverging funding dynamics between US dollar and euro markets, the continued push toward market electronification, and shifting post-trade regulatory requirements—such as SFTR and margining rules—are set to reshape operating models and counterparty workflows.
As Euronext continues its journey to a pan-European, cross-asset clearing provider, it is uniquely positioned to support firms navigating these shifts. The growing demand for transparency, resilience and efficiency across funding markets reinforces the critical role of clearing in the next phase of European capital markets.
Please note that since publication, some data included may no longer reflect the latest market developments, particularly considering the significant movements seen during the first quarter of 2025.
Footnotes
(Source: ICMA-European-Repo-Market-Survey-Number-48-Conducted-December-2024-Published-April-2025-090425.pdf, April 2025)
(Source: SEC extends key deadlines for US Treasury clearing rule, Reuters, 26 February 2025)
(Source: Gilt repo clearing mandate on Bank of England’s radar, Risk.net, 12 March 2025)
(Source: ICMA European repo survey shows outstanding value of €10.8 trillion, Securities Finance Times, 09 April 2025)
