The Industrial and Commercial Bank of China (ICBC) has joined Clearstream’s tri-party repo service, becoming the first Chinese financial institution to do so. The bank’s clients can now participate in tri-party repo under title transfer with offshore counterparties.
Addressing ICBC’s move in a press release, Clearstream describes it as “a significant step in strengthening the Chinese repo market”. Tri-party repos offer “an attractive balance of high safety and potential for greater returns compared to traditional money market instruments and bilateral repos”. Clearstream’s tri-party repo service aims to be a “neutral intermediary” that provides simplified settlement, administrative support, and value-added services throughout the trade lifecycle.
Hailu Wang, general manager of Global Markets Department at ICBC, believes that the partnership could result in higher efficiency and lower counterparty risk in the repo market, helping its development in China.
