Frankfurt, Germany - May 6, 2003 - Eurex, the international exchange organization, will nearly double the number of its participants for the Swiss franc repo market on Eurex Repo in the next two years when the Swiss National Bank (SNB) steers its Lombard facility via Eurex Repo as of 2004.
Some 80 additional participant banks are then expected to be connected to Eurex Repo. There are currently over 100 participants active in the Swiss franc repo market at Eurex Repo. This is why Eurex Repo is expecting another strong boost in growth for the outstanding volume on its platform, currently amounting to CHF 50 billion (US$ 37.31 billion). Eurex Repo is also expecting electronization of the repo markets to accelerate in the euro repo area, where currently only about 10 percent of the outstanding volume is being traded electronically via a Central Counterparty.
Dr. E. SpÃ¶rndli, head of Financial Market Operations at the Swiss National Bank, said: "The overnight repo business via the Eurex Repo electronic trading platform will take the place of the traditional Lombard facility for the banks in the future. "The repo business in Swiss francs has become increasingly important in recent years, SpÃ¶rndli said. "The repo system has been expanded in several steps and has proved to be secure and efficient. The Eurex Repo trading platform is used for monetary-policy transactions as well as the auctions for bonds and registered money-market claims of the Swiss confederation."
The Swiss National Bank also uses repo transactions to make intraday liquidity available to the banks. Repo transactions are also being used to an increasing degree to balance out the liquidity in Swiss francs between the banks. The SNB's Lombard facility has an important steering function: A bank that has a Lombard credit limit can make use of this facility on short notice to bridge an
unexpected liquidity squeeze. In the future, use of the Lombard facility will be made by means of the repo transaction, which enables better management of the securities.
Walter Allwicher, Uwe Velten
Tel: + 49-69-21 01-1500