【歐洲央行】回購(gòu)的國(guó)際維度：五個(gè)新事實(shí)-2025

EUROPEANCENTRALBANK

EUROSYSTEM

FelixHermes,MaikSchmeling,AndreasSchrimpf

WorkingPaperSeries

Theinternationaldimensionofrepo:fivenewfacts

No3065

Disclaimer:ThispapershouldnotbereportedasrepresentingtheviewsoftheEuropeanCentralBank(ECB).TheviewsexpressedarethoseoftheauthorsanddonotnecessarilyreflectthoseoftheECB.

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Abstract

Weanalyzetheinternationaldimensionofrepomarketsusingnoveleuroarearegulatorymicrodata.OurfindingshighlightthedeepintegrationoffundingmarketsacrosstheAtlanticandtheUSdollar’soutsizedrole.Ourpaperdocumentsfivekeyfacts:(1)USdollarreposbyeuroareaentitiesaccountforapproximately40%oftotalvolumesandarecomparableinsizetoeurorepos;(2)termrepos(withmaturitiesbeyondoneday)arequantitativelymorerelevantthancommonlythought,especiallynon-centrallyclearedones;(3)repomarketshavebecomemorecollateral-driven,involvingdiversenonbankfinancialplayersandtradingmotives;(4)banks’intragrouptransactionsformalargeshareofnon-centrallyclearedvolumes;and(5)haircuts,evenforriskiercollateral,areoftenzeroornegative,especiallyineurotrades.WeshowintwoempiricalapplicationsthatUSmonetarypolicyshocksspillovertoeuroreporatesandthatnegativehaircutsarisefrommarketpowerandcollateraldemanddynamics.

JELClassification:G12,G14

Keywords:Repomarket,USdollarfunding,Haircuts,Bankintermediation

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Non-technicalsummary

ThispaperanalyzestheinternationaldimensionofrepomarketsusingtheSecuritiesandFinancingTransactionsDatastore(SFTDS),anextensivedatasetcomprisingdetailedregu-latorymicrodatafromtheeuroarea.ThehighgranularityofSFTDSallowsustostudyreposinmultiplecurrencies,mostnotablytheUSdollar.Ouranalysisprovidesauniqueandcom-prehensiveviewoftheinternationalintegrationanddynamicsofrepomarkets,particularlyhighlightingthecriticalroleoftheUSdollar.

Wepresentfivenovelempiricalinsightsthatsignificantlyenhancetheunderstandingofmodernrepomarkets.First,USdollarreposinvolvingeuroareaentitiesaccountforap-proximately40%ofoutstandingUSDandEURrepoactivity,underscoringthesignificantinternationalintegrationoftherepomarketandchallengingthenotionofmarketsegmenta-tionandhomebias.

Second,termrepos,ortransactionswithmaturitieslongerthanovernight,arequantita-tivelymoreimportantthancommonlyassumed.Inparticular,only26%ofeuro-denominatedand50%ofdollar-denominatednon-centrallyclearedtransactionsareovernight.Ouranalysishassignificantimplicationsforunderstandingfundingstabilityandrolloverrisks.

Third,wefindthatrepomarketshaveincreasinglybecomecollateral-driven,reflectingthediverseparticipationanddistincttradingmotivesofnonbankfinancialinstitutions.Thistrendismorepronouncedineuro-denominatedtransactions,indicatingstructuraldifferencesacrosscurrencies.

Fourth,intragrouptransactionswithinbankinggroupsaccountforasubstantialshareofrepovolumes.Specifically,theyaccountfore700billionineuro-denominatedande350billionindollar-denominatedoutstandingdailyvolumes.Thisfindinghighlightshowbanksinternallymanageliquidityandfundingacrossinternationalsubsidiariesandunderscorestheimportanceofinternalcapitalmarkets.

Fifth,wedocumentthesurprisingprevalenceofzeroandevennegativehaircuts,wherecashlendersprovidemorecashthanthevalueofthepledgedcollateral.Wefindthatsuchtransactionsaredrivenbythedemandforspecificcollateral,marketpower,andthedynamicsofinternalcapitalmarkets,particularlypronouncedineuro-denominatedrepos.

Tofurtherillustratetheimplicationsofthesefindings,thepaperconductstwofocused

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empiricalapplications.ThefirstexaminestheinternationaltransmissionofUSmonetarypolicytoreporatesintheeuroarea.WefindapassthroughofUSmonetarypolicytoeuroreporatesofapproximately5%.Thesecondapplicationexploresthedeterminantsofnegativehaircuts,providingempiricalevidenceforthepatternsexploredunderfact5,aswellasnotabledifferencesbetweeneuro-anddollar-denominatedmarkets.

Overall,thispaperoffersnovelinsightsforpolicymakersandmarketparticipantsregard-ingthestructureandfunctioningoftheinternationalrepomarket,cross-borderfinancialintegration,andthemechanismsofmonetarypolicytransmissionandfinancialstability.Italsooffersnewavenuesforacademicresearchonfundingmarkets.

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1.Introduction

Theriseofinternationalfinancialmarketsinthepost-warerahasbeenmarkedbythedevelopmentofoffshoredollarmarkets,mostnotablytheEurodollarmarketthatemergedinthe1960s.Thisallowednon-USbankstotakedollardepositsandmakedollarloansoutsidetheUS,creatingaparallelmarketfordollarborrowingandlendingthatplayedacrucialroleintheinternationalizationofbankingandfinance.

1

Today’srepomarketsrepresentamodernevolutionoftheseinternationalfundingdynamics,withsecuredlendingreplacingtheunsecuredinterbanklendingthatcharacterizedtheearlyEurodollarmarket.LiketheirEurodollarpredecessors,thesemarketsdemonstratehowdollarfundingactivitiesextendwellbeyondUSbordersandinstitutions.

Wecontributetounderstandingthesemoderninternationalfundingmarketsbyprovidingthefirstcomprehensivestudyofmultiplecurrency-denominatedrepoactivity,withafocusontheUSdollarandeuro.Todoso,weusenovelmicrodatacoveringallrepotransactionsinvolvingeuroareaentities.Importantly,ourdataalsoincludetransactionsbybranchesorsubsidiariesofentitiesheadquarteredoutsidetheeuroarea,notablyUSbanks’officesoperatingintheeuroarea.Thisresultsinahighlyaccuratesnapshotofthestructureandintermediationpatternsintheinternationalrepomarketandallowsustocarefullyinvestigatetheanatomyofthismarket.

Wedelineaterepomarketsbasedonthecurrencydenominationoftransactions(inlinewithe.g.,

CommitteeontheGlobalFinancialSystem

,

2017

).Thiscurrency-baseddefinitionisparticularlyrelevantintherepomarket:eurorepoactivityisnotconfinedtotheeuroarea,justasdollarreposarenotconfinedtotheUS.Acurrency-focusedapproachavoidsconflatingcurrencywithlocationandthereforeprovidesacleanerlensthroughwhichtoexaminetheinternationaldimensionofrepomarkets.

2

Theanglewepursueinourpaperisrelevantforseveralreasons.First,evenasthetradi-tionalEurodollarmarketbasedonunsecuredinterbanklendinghasdeclinedinimportance,theUSdollar(USD),astheworld’sprimaryreservecurrency,continuestoholdaparticularlyimportantpositioninglobalfundingmarkets,ashasbeencarefullydocumentedintheear-

1

Schenk

(

1998

)studiesonthehistoryofEurodollarmarkets.

2Alsosee

Avdjiev,McCauley,andShin

(

2016

)onthisissue,whoarguethatinternationalfinanceanalysisneedstobreakfreefromthe“triplecoincidence“oftreatingthecurrencyarea,thedecision-makingunit,andtheeconomicareaasoneandthesame.

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lierliterature(seeforexample

Ivashina,Scharfstein,andStein

,

2015

;

Maggiori,Neiman,and

Schreger

,

2020

;

Correa,Du,andLiao

,

2022

;

Aldasoro,Ehlers,andEren

,

2022

;

Shin

,

2023

).Second,itisviathesemoneymarketsthatmonetarypolicyexertsitsmostdirecteffectsonfinancialmarkets.Repomarketsarehencecrucialformonetarypolicytransmission,andcouldbethesourceofspilloversbothacrosscurrenciesandmarkets.Finally,thismarketiskeyforbanks’fundingandliquiditymanagement,andhencecriticalfromafinancialstabilityperspective.Thisisespeciallysowhenbanksoperateinacurrencyotherthantheirhomecurrency,notablytheUSD,givingrisetoincreasedrolloverrisk.

3

Againstthisbackdrop,adeeperunderstandingofthestructureanddynamicsinthesemarketsisimportantforpolicymakers,marketparticipants,andacademia.

Thekeyadvantageofourstudyistheabilitytodrawonahighlygranulardatasetthatprovidesaholisticperspectiveofrepomarkets.OurempiricalresultsarebasedontheSecuritiesandFinancingTransactionsDatastore(SFTDS).ThisnoveldatasetstemsfromtheSecuritiesandFinancingTransactionsRegulation(SFTR),whichrequireseuroareaentitiestoreportalltheirsecuritiesfinancingtransactions(SFTs).Duetothestructureoftheregulation,thedatasetalsoincludestheactivityoftheseentitiesincurrenciesotherthantheeuro,notablytheUSdollar.Suchtransactionsoccur,e.g.,wheneuroareaentitiesengageinforeigncurrencyreposwitheachotherorwhentheytransactwithforeignentitiessuchasBritishorUSbanks.

Ourpaperisstructuredaroundfivemainstylizedfacts.Theyshedlightonvariousaspectsoftheinternationaldimensionanddeepintegrationoffundingmarketsinthemajorcurrencies,and,inseveralinstances,suggestanewperspectivecomparedtopriorfindingsthathavebeenderivedfromnarrowerdatasets.

First,wequantifytheusageoftheUSdollarinmoneymarketsoutsidetheUSand

thedeepintegrationofeuroareabanksintheinternationaldollarsystem.Weshowthat

dollaractivityinvolvingeuroareaentitiesiscomparableinsizetoeuroactivity,withdollar-

denominatedtransactionsrepresentingapproximately40%oftotaleuro-anddollar-denominatedoutstandingvolumes.ThisfindingreflectsthedominantroleoftheUSDinglobalfunding

3ForeignbanksmostlylackdirectaccesstoFederalReservefacilities,makingtheirdollarfundingpo-tentiallyfragileduringperiodsofmarketstress.AsshowninstudiesoftheFed’sinternationalliquidityfacilities(

BahajandReis

,

2022

;

GoldbergandRavazzolo

,

2022

),suchfragilitycanamplifysystemicrisks.Forexample,ifeuroareabanksfacedifficultiesinobtainingdollarfundingthroughrepos,theycanresorttofiresalesofdollarassets,potentiallycreatingbroadermarketstress.

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marketsandqualifiesearlierresultssuchas

Schaffner,Ranaldo,andTsatsaronis

(

2019

)whoarguethatrepomarketsaresubjecttohomebias.

Second,weshowthatthereismuchmoreactivityinreposwithlongermaturities,thatis,goingbeyondovernighttenors,thancommonlyassumed.

4

Thevastmajorityofpriorworkonrepohasfocusedonshortmaturities(e.g.

Mancini,Ranaldo,andWrampelmeyer

,

2016

;

Bechtel,Ranaldo,andWrampelmeyer

,

2023

;

H¨user,Lepore,andVeraart

,

2024

),givingrisetotheideathatrepoisalmostexclusivelyovernight.Onereasonbehindthisfocusinpastworkcouldbethatovernightreposdominatedatasetsthatcovertransactionflows;anothercouldbethatovernightmaturitiesaremorecloselylinkedtoshort-terminterbankmarketswherecentralbanks’monetarypolicytendstoexertitsstrongestcontrol.Ourdata,inturn,allowustoexamineoutstandingvolumes,whichpaintsamorenuancedpicture.Forexample,weshowthatlonger-termreposaccountforasignificantshareofthemarketandthatthereissubstantialvariationinmaturitystructuresbetweencurrencies.Specifically,only26%ofeuro-denominatedoutstandingtradesareovernightcomparedto50%fordollar-denominatedtradesinnon-centrallyclearedtransactions,suggestingfundamentallydifferentusesofrepotenorsacrosscurrencies.Thiscomparestoapproximately70%ofcentrallyclearedoutstandingtransactionsbeingovernight,regardlessofthecurrency.Theseaspectsrelatedtothematuritystructurearecrucialforunderstandingfundingstabilityandrolloverrisksininternationalrepomarkets,aslonger-termcommitmentsaffectinstitutions’abilitytoadjusttheirfundingstructureduringstressevents.

Third,thestructureofrepomarketshaschangedtobecomemorecollateral-orientedratherthancash-oriented,involvingadiversesetofnonbankfinancialplayersandtradingmotives,withnotabledifferencesbetweencurrencies.Theprevalenceofcollateral-driventransactionsisstrongerforeurothanforUSdollarrepos:theyrepresent89%ofeuro-denominatedversus65%ofdollar-denominatedoutstandingvolumes.OnefactorcouldbethelesshomogeneousnatureofeurocollateralthanUSDcollateral(

EhrmannandFratzscher

,

2017

;

Jiang,Lustig,VanNieuwerburgh,andXiaolan

,

2020

).AnothercouldbethatUSDfundingmotivestakeamorecentralroleforeuroareaentities,giventhedollar’sroleastheworld’sprimaryfundingcurrency,henceimplyingagreaterroleforgeneralcollateralbaskets.

4Wedefineovernightreposasthosewithamaturityofoneday.Thus,thisalsoincludestomorrow-nextandspot-nexttransactions.

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Ourfindingsalsoshowthatcollateral-driventradesdominateevenfordollarrepos.

5

How-ever,evenwithincollateral-driventransactions,wedocumentsubstantialdifferencesinthepositioningofmarketparticipants.Whereaslower-tier(i.enon-dealer)banksandinsurancecorporationsandpensionfunds(ICPFs)arethemainnetcashborrowersintheeurorepomarket,itisespeciallyinvestmentfunds(mostlyhedgefunds)thatarenetcashborrowersinthedollarrepomarketasasourceofleverage.

Fourth,wedocumentacrucialroleforinternalcapitalmarkets,wherebanksshiftfund-ingbetweentheirsubsidiariesorbranchesthroughinternalrepos.Intragrouptransactionsrepresentmorethanathirdofeuro-denominatedandaboutaquarterofdollar-denominatedoutstandingvolumesinnon-centrallyclearedrepo.

6

While

CetorelliandGoldberg

(

2012a

)highlightinternalcapitalmarketsintraditionalbanklending,weshowtheirpreviouslyun-documentedimportanceinrepomarkets.Thesignificanceofintragrouptransactionsre-gardlessofcurrencyshowshowdeeplyintegratedinternationalrepomarketsare,blurringjurisdictionalborders.

Fifth,haircuts(evenforriskiercollateral)areoftenzero,andevennegativehaircutsarequitecommon.Negativehaircutsmeanthatmarketparticipantsendowedwithhigh-qualitycollateralcanturntotherepomarkettoobtainmorefundingthanthemarketvalueofthepledgedsecurity.Wefindthatnegativehaircutsareparticularlyprevalentineuro-denominatedtrades,wheretheyrepresent9%ofoutstandingvolumescomparedto4%indollar-denominatedtrades.Thisnegativehaircutphenomenonsuggeststhattheconventionalviewthathaircutsprimarilyserveasariskmanagementtoolforthecashlender(see

Gorton

andMetrick

,

2010

;

Krishnamurthy,Nagel,andOrlov

,

2014

;

Copeland,Martin,andWalker

,

2014

)maywarrantreconsideration.Instead,ourresultssuggestthatnegativehaircutsarisefromthreemainsources.First,sincehaircutsareendogenouslysetinbilateraltransactions,theyreflectmarketpower,wherecertaininstitutionscannegotiatebettertermsduetotheirstrongerbargainingposition.Second,negativehaircutsindicateahighdemandforspecificsecurities.Receivingaparticulartypeofcollateralmaybesovaluableforcertainplayers

5Toputthisintoperspective,theearlierliteratureontheUSrepomarketsuggeststhathalfofthecoreUSmarketiscollateral-driven(see

D’Amico,Fan,andKitsul

,

2018

;

Baklanova,Caglio,Cipriani,andCopeland

,

2019

).

6Forreference,

Hardy,McGuire,andvonPeter

(

2024

)showthatbasedonthelocationalbankingstatisticsoftheBIS,intragroupclaimsandliabilitiesrepresentbetween13%and37%oftotalclaimsandliabilitiesacrosstheirreportingcountries.

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thattheyacceptthattheircashlendingisnotfullycoveredbythecollateralvalue.Third,negativehaircutsaremoreprevalentininternalcapitalmarkets,wherebankinggroupsusenegativehaircutstomovefundingbetweentheirmembers.

Weincludetwoempiricalanalyses,motivatedbythefivefactsdiscussedabove,toshow-casethestrengthofourdataandtoprovideadditionalanalyticalinsights.First,connectingtothefirstfactontheprevalenceofUSDtransactionsinvolvingeuroareaentities,wezoominoninternationalmonetarypolicyspilloverstorepomarkets,leveragingthegranularityofourdata.WeshowthatUSmonetarypolicyhassignificantspillovereffectsoneuroreporatesandthattheimpactondollarratesisheterogeneousbycounterpartytype.Inparticu-lar,passthroughinUSDratesissmallerwhennonbanksareinvolved.However,evenintheinterbankmarket,passthroughdeviatesfromaone-to-onerelationshipwiththepolicyratewhensmallerbankstransactwithlargerbanks.Second,wedissectthedriversoftheneg-ativehaircutphenomenondiscussedaboveandshowhowtheimportanceofmarketpower,collateraldemand,andinternalcapitalmarketsdiffersbetweeneuroanddollarrepomarkets.Wefindthattheuseofinternalcapitalmarketsisespeciallyimportantinexplainingnega-tivehaircutsineuro-denominatedtransactions,whereasmarketpowerseemstobeespeciallyimportantindollar-denominatedtransactions.

Together,theseresultsprovidenewinsightintotheinternationaldimensionofrepo.Thisappliesbothtothecurrencydimension–notably,thedollarasthemainfundingcurrencyoftheglobalfinancialsystem–andthegeographydimension(cross-borderactivityinvolvingentitiesfromtheeuroareaandnon-euroarea-residentcounterparts).Severalofthefactswedocumentforrepoactivityalongtheseinternationaldimensionsdifferfromthoseinprevi-ousresearchonsingle-currencyrepomarketsorspecificsegmentsthereof.Ourresultsthussuggestthatsomeofthecommonviewsprevalentintheliteratureshouldberevisited.Con-sequently,ourfindingshaveimportantimplicationsforunderstandingglobalmoneymarkets,intermediationpatternsintheglobalfinancialsystem,monetarytransmission,andfinancialstability.

Theremainderofthepaperisstructuredasfollows.Section

2

providesanoverviewofthedataemployedandprovidesataxonomyaswellasbasicdescriptivestatistics.Section

3

thenpresentsthefivefactsofourpaperingreaterdetail,whileSection

4

presentsthetwoempiricalapplications.Lastly,Section

5

concludes.AseparateAppendixcontains

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informationondata-cleaningproceduresandprovidesadditionalresults.

2.DataandTaxonomy

2.1.Dataoverview:theSecuritiesandFinancingTransactionsDatastore

Wemakeuseofnovelregulatorymicrodata,theSecuritiesandFinancingTransactionsData-store(SFTDS).ItcoversallSFTactivityofeuroareaestablishedentitiesandtheirbranches.Forthatreason,ourdatacovernotonlythe“euro”repomarket(transactionsdenominatedineuros)inacomprehensiveway,butalsoalargeshareoftheactivityofthe“foreigncurrency”repomarket(transactionsinUSdollarsandothercurrencies).

SFTDSresultsfromtheSecuritiesandFinancingTransactionsRegulation(SFTR).SFTRisacomprehensiveregulatoryframeworkthatmandatesallentitiesestablishedwithintheEuropeanEconomicArea(EEA),branchesofEEA-establishedentitieslocatedoutsidetheEEA,andbranchesofnon-EEAfirmslocatedinsidetheEEAtoreporttheirSecuritiesFinancingTransactions(SFTs).SFTDSrepresentstheeuroareasubsetofthis.

TheSFTDSrepomarketsegmentincludesallrepoandreverserepotransactionsofentitiesestablishedinsidetheeuroarea,branchesoftheseentitieslocatedoutsidetheeuroarea,andnon-euroareaentitieslocatedinsidetheeuroarea(seealsoTable

A.1

intheAppendix).

7

Itisparticularlythelattertwofeaturesthatarekeytotheinternationaldimensionofthedata.Ontheonehand,subsidiariesandbranchesofnon-euroareabanksactiveintheeuroareacreateadirectlinkbetweeneuroandforeigncurrencyfundingmarkets,forexample,viatheirbankinggroups.Ontheotherhand,branchesofeuroareabanksactiveabroadcaptureactivitypurelyoutsideoftheeuroarea.Forexample,arepotransactionbetweentheUSbranchofaeuroareabankandalocalUSbankisincludedinourdata.

Inshort,thedataatourdisposalprovideahighlyaccurateandholisticsnapshotoftheinternationalrepomarketcoveringrepotransactionsindifferentcurrenciesbyentitiesthathavealocationaleuroareapresence(ofwhichsomemayalsobeofforeign,e.g.USandU.K.,nationality).Thetwomostcommontransactionsarethosedenominatedineuros(EUR)orUSdollars(USD),whicharethefocusofthispaper.

7SFTDScoversthreetypesofSFTs,namelyrepoandbuy/sell-backs,securitieslending,andmarginlending.Inthispaper,wefocusonthefirsttype,asitconstitutesthelargestsegmentofthedata.

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Themainadvantageofourdataisitsunprecedentedcomprehensivenesscoupledwithhighgranularity.Previousdatasetsontherepomarkettypicallyincludeonlysubsetsofoverallactivity.Forexample,severalinsightfulpapersarebasedontheEuropeanCentralBank(ECB)MoneyMarketStatisticalReporting(MMSR)dataset,whichonlycoverstransactionsineurosreportedbythelargestbanks(seeforexample

Barbiero,Schepens,andSigaux

,

2024

;

deSouzaandHudepohl

,

2024

).DataobtainedfromprivatesectorrepotradingplatformssuchasBrokertec,MTS,orEurexprovidevaluableinformation,butprovidearatherspecificviewonparticularsegments(seeforexample

Arrata,Nguyen,Rahmouni-Rousseau,and

Vari

,

2020

;

Ballensiefen,Ranaldo,andWinterberg

,

2023

).Bycontrast,thequantitativelyverylarge–butveryopaque–non-centrallycleared,or‘bilateral’,reposegmenthas(withveryfewexceptions)beenlargelyunexplored,primarilyduetoalackofdata.Similarly,dataontheUSrepomarketarelimitedbythereportingofasubsetofentitiesorbythetypeofclearing(seeforexample,

Copelandetal.

,

2014

;

Krishnamurthyetal.

,

2014

;

Hempel,Kahn,

Mann,andPaddrik

,

2023

),highlightingthebenefitsofamorecomprehensivedataset,suchastheSFTDSusedinthisarticle.

2.2.Taxonomy

Itisusefulfirsttoprovideclarityonkeymarketcategorizationsandterminology.Tothisend,weproposeataxonomyinFigure

1

.Theguidingprinciplesofthecategorizationfollowthekeydecision-makingprocessesofmarketparticipantswhileshowingwhatinformationisincludedintheSFTDS.Thisclassificationconsistsofthreehierarchicallevelsthatcapturethechoicesthatmarketparticipantsmakewhenparticipatinginarepotransaction.ThetaxonomyinFigure

1

providesaframeworkandalsoshowstheobservedoutstandingrepovolumesacrossdifferenttypesoftransactionstoprovidebasicinformationaboutdifferenttypesofrepotransactions.

Atthehighestlevelofdecision-making,themaindeterminantofarepotransactionistheunderlyingeconomicmotive.Marketparticipantsenterintoreposwithadesiretoeithersourceaspecificsecurityascollateralortolendagainstaspecificassettheyhold(commonlyreferredtoascollateral-driventransactions).Alternatively,theymaywanttoraisecashorlendagainstcollateral,butwithoutmakingreferencetoaspecificsetofcollateral(commonlyreferredtoascash-driventransactions).

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TherelativequantitativeimportanceofthesemotivesintermsofvolumesdiffersstronglyinSFTDS.Wefollowthegeneralassumptionsintheliteraturethattradeswithgeneralcol-lateralunderlyingarecash-driven(orfunding-driven),whereastradeswithspecificcollateralunderlyingarecollateraldriven(seeforexample

Mancinietal.

,

2016

;

Brand,Ferrante,and

HubertdeFraisse

,

2019

;

Schaffneretal.

,

2019

).

8

Approximatelye3.7trillion(or>75%)indailyoutstandingeuro-anddollar-denominatedvolumesreflectcollateral-driventransactionscomparedtoapproximatelye1trillion(or<25%)forcash-driventransactions.Obviously,thisfundamentalmotiveforcashversuscollateralislinkedtoachoiceregardingthecurrencydenomination.Ifanentitywantstosourceeurocollateral,theywillhavetolendeurocash,whiletheywouldlenddollarcashfordollarcollateral.

9

Iftheywanttosourcecash,thelinkisevenmoredirect.

Marketparticipantsmustthendecideontheapprop