State Street, one of the world’s largest custodian banks, has joined Eurex via its Munich-based subsidiary State Street Bank International (SSBI).

State Street has chosen Eurex as the first clearing house outside the U.S. to trade and centrally clear repo transactions. The onboarding of one of the world’s largest custodian banks is another milestone for Eurex’s cleared repo markets. First transactions have already been successfully executed.

State Street has joined Eurex through its German subsidiary, State Street Bank International GmbH (SSBI). The power of multilateral netting will provide tangible risk management and collateral optimization benefits to State Street’s broad client base. Through its Eurex membership, State Street will be able to expand its European franchise and service offering.

Over 160 counterparties registered with Eurex’s repo markets

Eurex’s deep liquid and centrally cleared repo markets allow clients to trade repos with over 160 registered participants, including commercial and central banks, as well as government financing agencies and a broad range of supranational organizations. They help market participants to efficiently and securely raise or place cash against more than 13,000 domestic and international securities.

Frank Gast, Member of the Management Board of Eurex Repo: “We welcome State Street Bank International as a Trading and Clearing Member of Eurex Repo and Eurex Clearing. The opportunities in the European repo market are immense and Eurex is excited to facilitate SSBI’s growth with our centrally cleared and innovative offerings.”

Travis Keltner, Global Head of Repo and Alternative Financing Solutions at State Street: "Eurex's ample access to stable market liquidity significantly enhances State Street's liquidity tool kit. With this membership, State Street can build upon the launch of this Eurex clearing foundation to further support our clients’ needs especially in capital efficient trading and clearing.”

Simona Stoytchkova, Member of the Executive Management Board and Head of Global Markets Division SSBI: “We are thrilled about the exciting opportunities our new trading and clearing membership on Eurex Repo and Eurex Clearing will bring. The demand on European Repos is immense, and this important milestone in State Street’s growth journey in Continental Europe enables us to better serve our local balance sheet and clients in the future.”

Significant volume increase in Eurex’s cleared repo markets

With the current market environment of increasing interest rates, TLTRO repayments, and further reduction of excess liquidity, Eurex is seeing a significant increase in trading activities and reaching new record volumes in its cleared repo markets. During the first four months, total traded volume across all markets increased by about 120 percent compared to the same period in 2022, thereof 37 percent in the Repo market and about 340 percent in GC Pooling. Just looking at the buy side, total traded volume tripled during the same period year-on-year.

As a result, Eurex was also able to increase its market share in Europe. According to a recent report by ICMA (International Capital Markets Association), outstanding volume in European repo markets at the end of 2022 was 13 percent above the previous year’s level, while it rose 55 percent at Eurex.