Benefits and Risks of Central Clearing in the Repo Market

Viktoria Baklanova, Ocean Dalton (ocean.dalton@ofr.treasury.gov) and Stathis Tompaidis
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Ocean Dalton: Office of Financial Research

No 17-04, Briefs from Office of Financial Research, US Department of the Treasury

Abstract: The repurchase agreement (repo) market is a major source of short-term funding in the financial system. Many repo transactions between dealers are centrally cleared. This brief, using data from the OFR's interagency bilateral repo data collection pilot, finds economic benefits for dealers in expanding central clearing to transactions between dealers and nondealer clients, but increased risks to the central counterparty.

Keywords: central clearing; repurchase markets; data collection pilot; central counterparties (search for similar items in EconPapers)
Pages: 8 pages
Date: 2017-03-09
New Economics Papers: this item is included in nep-mon
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Citations: View citations in EconPapers (8)

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