With some 800 registrees in Luxembourg this week, the Deutsche Börse group’s yearly Global Funding and Financing Summit has grown from a tight client gathering to a main event on Europe’s collateral and repo scene.
The stage content of the Global Funding and Financing Summit 2025 was hosted under so-called Chatham House rules, permitting reporting, including that by PostTrade 360°, under the condition that presented facts and views not be attributed to individuals.
As the incoming Trump administration in the US makes fast moves on geopolitics, and increasingly reaches for import tariffs as a tool to instill desirable behaviour with its various counterparties, the global foreign-exchange and treasury-bond markets are areas where turbulence could result. Also, starting from a very good standing of the dollar and the creditworthiness of the US, recent developments are beginning to raise eyebrows among credit rating organisations.
These indicators of continuing volatility formed part of the background picture as the Global Funding and Financing Summit got rolling in Luxembourg on Wednesday morning.
A look into the resulting effects in the repo markets followed. (Repos – repurchase agreements – effectively allow holders of securities, such as pension funds and other investment institutions, to borrow money at risk-free interest rates by posting securities as a guarantee that they will pay back what they owe. Trends in the global treasury bond markets will be a strong driver of the terms for this form of financing.)
Many European central banks are still treating or licking wounds from their so called quantitative easing activities through the Covid-19 area. Their campaigns generated trillions in liabilities, generating negative net interest margins of sometimes several percentage points.
In the post-trade area, the Deutsche Börse Group comprises CSD activities under the Clearstream, as well as central clearing operator Eurex. Eurex’s activities include a large part of Europe’s repo clearing – the service of guaranteeing as a trusted third party that both parties to a repurchase agreement will honour their commitment to let money versus securities return to their original holder on expiry.