Repo market still dominated by big banks even after Basel III rules, study says

5 April 2019 7:36pm
The US shadow banking market in repurchase agreements has opened only slightly to new securities dealers since post-crisis capital rules were introduced, leaving the short-term loan market under the domination of large banks, according to US Federal Reserve Bank of New York researchers.

“The prediction of a tectonic shift in the repo market with new repo participants’ gaining market share seems not to have materialized,” the study this week said.

New dealer participants in one of the two main interdealer repo markets made up only 3 percent of total gross activity in the last quarter of 2018, the New York Fed economists’ blog said.