Launch of EU Repo Facility

In the week of 7th October, the EU will launch its Repurchase Agreement (Repo) Facility. The introduction of the Repo Facility marks the implementation of the final measure to support the EU-Bond market that the EU committed to implementing in its communication in December 2022. Other measures introduced include the unified funding approach and quoting arrangements in 2023.

Repo facilities are commonly used by sovereign issuers, and the addition of the EU Repo Facility to the EU’s toolkit marks a natural next step in the development of the EU as an issuer. The introduction of the Facility will strengthen the role of EU-Bonds as liquid and safe collateral, following the exponential growth in the secondary market trading of EU-Bonds in recent years.

Under the Facility, the EU will offer its Primary Dealers the possibility to source specific EU-Bonds on a temporary basis, supporting their capacity to post firm public quotes. By acting as a backstop to the Primary Dealers’ secondary market activity, the Facility will allow investors to be more confident in the terms on which they can trade EU-Bonds in the secondary market, improving the overall efficiency and fluidity of the EU-Bonds market.

EU repo transactions will be executed on the Eurex Repo web-based trading system and will be cleared via Eurex Clearing as central counterparty (CCP). Deutsche Bundesbank will act as the General Clearing Member (GCM) for the settlement of the transactions.  Full details of the facility can be found in our dedicated factsheet here. 

To mark the launch of the Facility, Commissioner Hahn, together with Deutsche Bundesbank President Dr Joachim Nagel will lead a “ Ring The Bell Ceremony” on 7th October on the trading floor of the Frankfurt Stock Exchange.  You can follow the ceremony at 5pm CET via this link.