The EU Commission (EC) has joined Eurex as a venue for transactions in repurchase agreements.
The EC is the latest member to join the Eurex Repo segment bringing the number of participants to 165 – including 10 supranational institutions and agencies as well as 5 central banks such as Deutsche Bundesbank. The move delivers on the Commission’s announcement in December 2022 to develop the market infrastructure for EU bonds by implementing a repo facility.
Johannes Hahn, European commissioner for budget and administration, said, “The European Commission’s objective is to strengthen the European capital markets and ensure financial stability and their sovereignty. We need a liquid EU bond market and Eurex is a great partner to achieve it.”
Germany’s central bank, Deutsche Bundesbank, has been selected as general clearing member by the European Commission.
Joachim Nagel, president of Deutsche Bundesbank, said, “Acting as a general clearing member at Eurex for several public entities for many years, the Bundesbank brings experience to the table. With this robust track record, we are happy to provide our services to the Commission. I look forward to implementing our newly established partnership and the benefits it will bring to our financial system.”
Under its unified funding approach, the European Commission decided at the end of 2022 to create a liquid curve of large benchmark bonds, branded “EU-Bonds”, rather than separately denominated bonds for individual programs.
Since then, the Commission developed the ecosystem for EU bonds further, such as by implementing the European Issuance Service and quoting arrangements for electronic trading platforms. The EU’s total debt outstanding now stands at over €560 billion, making them the 5th largest issuer within the EU27 member states.
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