Danmarks Nationalbank is now actively trading and centrally clearing repo transactions at derivatives market operator Eurex, which cites the onboarding of the first Nordic central bank as a major milestone for its cleared repo markets.
Eurex’s centrally cleared repo markets allow users to potentially trade repos with over 160 registered participants, supporting the raising or placing of cash in four currencies against more than 13,000 domestic and international securities. Apart from commercial banks and most recently buy-side entities, Eurex has also developed a membership base across European public sector entities.
Danmarks Nationalbank is the second central bank outside the euro area to join Eurex and overall, the fifth central bank connected to Eurex for repo so far. Martin Wagner Toftdahl, head of banking and markets at Danmarks Nationalbank, says, “Joining centrally cleared repo markets is an important milestone in our reserve management. First and foremost, centrally cleared repo transactions are perfectly in line with our aim of having broad market access and ensuring efficient management across products. Having access to liquid markets for cleared repos will further strengthen our ability to achieve underlying demand for our euro liquidity.”
Matthias Graulich, member of the executive board at Eurex Clearing, says, “We welcome Danmarks Nationalbank as a Eurex Trading and Clearing Member for our repo markets. Eurex is excited to facilitate the needs of Danmarks Nationalbank with our innovative offerings. Our cleared repo markets have proven to be an efficient and reliable source of funding during all times of market events.”
The total traded repo volume on Eurex across all markets has reportedly doubled year-to-data compared to the same period in 2022. General collateral (GC) pooling rose by 270 percent and the repo market by around 30 percent. Average daily term-adjusted trading volume, single counted, also reached levels of about €340 billion which is an increase of more than 70% compared to same period last year. Looking only at the buy side, total traded repo volume increased 265% year-on-year during the same period.
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