European Federation to Launch New Repo-Based Benchmark

Financial News, January 14, 2002 | Go to article overview

European Federation to Launch New Repo-Based Benchmark


Byline: Natasha de Teran

The European Banking Federation (EBF), the Brussels-based banking organisation, is set to introduce a new repo-based benchmark on which it hopes derivatives contracts will later be launched.

Repurchase agreements, or repos, are used to borrow and lend specific securities, and enable traders to cover their short positions, as well as to finance their bond holdings. In a repo trade the seller lends collateral, in this case bonds, against cash for a predetermined interest rate and period.

EBF was the original sponsor of Euribor (Euro inter-bank borrowing rate), the widely referenced benchmark. The federation's new index, called Eurepo, is designed to be an alternative and an adjunct to Euribor, and should help traders reduce some of the risk inherent in their swaps and money market portfolios.

By being able to swap between the two benchmarks, traders will be better able to manage their funding requirements and reduce their exposure to fluctuations in either the interest rate or repo market.

Eurepo will be based on the rate at which one bank offers funds in euros to another bank in exchange for euro-denominated securities. The paper is used as collateral for a range of quoted maturities stretching from overnight to one year.

The contributors to Eurepo will consist of a panel of 38 pre-selected banks that are already active in the cross-border Euro repo markets.

Godfried de Vidts, repo product manager at Fortis Bank and chairman of the European Repo Council, which is also sponsoring the venture, says: "The first direct benefit will be to all risk managers, providing them with a solid base for the daily evaluations of the positions of the front office. But the aim is that Eurepo will become a credible and established benchmark enabling derivative trading."

There have already been preliminary discussions with Eurex, the joint Swiss-German derivatives exchange, about a possible launch of derivative contracts on the index, according to another senior source involved in the project. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

European Federation to Launch New Repo-Based Benchmark
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.