BoE analysis sparks debate over reuse of repo collateral
Central bank policy analyst contends reuse of collateral may amplify volatility in repo rates
A recent Bank of England blog post on collateral reuse in repurchase markets has unnerved some industry participants, who fear the regulator may be preparing to clamp down on the practice.
Miruna-Daniela Ivan, lead policy analyst in the BoE’s financial stability strategy and risk directorate, argued in the post that the reuse by dealers of securities posted as collateral contributes to increased delivery failures and volatility in repo rates during periods of market stress. Her analysis shows the
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