This year’s Finadium Rates & Repo Conference was well attended, with over 140 delegates including Banks, Hedge Funds, Beneficial Owners, Vendors and Infrastructure Providers.
Panelists agreed that in recent years, there has been an increased blurring of siloed roles between securities lending and repo teams as firms strive for internal cooperation. Firms have increasingly turned to more structured trades, as in “structuring a solution” and piecing together necessary components to achieve maximum benefits from a balance sheet, liquidity and profitability standpoint.
New types of collateral are also being deployed as the industry adapts to regulation. This results in new and different types of liquidity – the market is not as USD/cash centric as in the past. Additionally, more and better communication between the buy side and sell side has also contributed to improved liquidity in the market.
The role that service providers play was discussed; connectivity and efficiency, global collateral management, and optimization were seen as the main drivers and benefits. It was said that in the future, the vast majority of trading decisions will be made by machines, connecting the market ecosystem in real time to make the trade.
All echoed the similar theme that in general, the repo market needs to further utilize automation opportunities. It was mentioned that while repo is still a relationship business that may be difficult to digitize and electronify, there are indeed some platforms that are figuring it out. A big concern is critical mass; technology is driving every industry and “to ignore it is a mistake.”
Head of Business Development – Americas
Pirum Systems Ltd