End-of-year note, from Yama Darriet , Head of OTC Capture and Repo Expansion Initiative
A market undergoing structural change
Across Europe, the interplay between liquidity, collateral and infrastructure has grown more critical than at any point since the pandemic. Market stresses, geopolitical shocks and the acceleration of regulatory reforms have pushed the repo ecosystem into a new phase of maturity.
This note draws on insights from the latest International Capital Markets Association (ICMA) European Repo Collateral Council (ERCC) survey, published in November 2025, to reflect on how these forces reshaped the market in 2025, and how infrastructure must evolve to support the years ahead.
The ERCC survey shows a market that is both expanding and structurally shifting. The total value of the repo books in the sample rose 11.9% year-on-year to €12.4 trillion, driven by heightened precautionary demand for liquidity following sharp rate volatility and changes in US trade policy.
Growth was led by euro-denominated repos, particularly Italian debt, where daily volumes on Euronext’s MTS Repo platform now exceed €185 billion. By contrast, the share of French, German and other core issuers continued to contract. US Treasuries also expanded their role as the largest single collateral component.
Trading behaviour mirrored these shifts. ATS-traded repo reached record highs, CCP clearing increased in tandem, dealer-to-client automated platforms resumed strong growth, and voice-brokers regained share during periods of volatility. Tri-party balances reached a new market-wide peak, despite a slight dip in the survey sample. Residual maturities extended across the board, with borrowers concentrated at the shortest tenor and lenders dominating the rest.
These dynamics reinforce a consistent theme: Europe’s repo market is sophisticated, increasingly international, and reliant on infrastructure that still functions more as a constellation of national systems than a fully unified framework. Efficient collateral mobility, across jurisdictions, curves and settlement chains, is becoming a defining element of resilience.
Infrastructure at the centre of European competitiveness
Global developments underline this direction of travel. The US Treasury clearing mandate and the Bank of England’s work on gilt repo resilience underscored the importance of clearing and infrastructure design. In Europe, T+1, the next SIU package and ESMA’s strengthened supervisory coordination continue to push towards operational coherence.
Repo, often dismissed as “plumbing,” has become one of Europe’s most strategic assets. It sits at the intersection of three priorities:
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First, financial stability. Episodes of sharp market stress — from the LDI crisis to volatility linked to US tariff policy in 2025 — have demonstrated the need for collateral to move quickly and predictably. The growing presence of global trading firms and hedge funds adds liquidity, but increases dependence on robust, harmonised infrastructure.
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Second, sovereign market liquidity. Sovereign bonds account for 87% of repo collateral, with Italian securities alone representing roughly 15% of euro-area collateral. This makes sovereign debt, and particularly Italian govvies, a central source of high-quality, centrally cleared liquidity.
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Third, monetary policy transmission. Inefficient collateral circulation weakens transmission. Dealers represent more than 85% of euro-area repo turnover, and ESRB analysis shows collateral demand can surge by €300 billion in stress. Infrastructure quality is therefore not simply operational — it is macro-critical.
Euronext’s strategic progress in 2025
It was against this background that Euronext advanced its Repo Expansion Initiative, designed to deliver a pan-European, fully integrated, one-stop-shop for repo.
Clearing has been expanded beyond Italian sovereign debt to include Spanish, Portuguese, Irish, French, German, Dutch, Belgian, Austrian, Finnish and supranational markets - directly addressing client demand for greater choice in a concentrated clearing landscape.
Euronext is developing general collateral baskets, scheduled for launch early in 2026, with planned offsets across correlated collateral and future cross-margining, subject to regulatory approval. Eligible collateral expanded to include USD, GBP and NOK, with further additions planned. Connectivity with TPAs, including Euroclear and Clearstream, was deepened to support real-time collateral mobility and streamlined settlement, with additional partnerships to follow.
In parallel, Euronext conducted a comprehensive review of its risk framework to further strengthen resilience and efficiency. Clients will benefit from measurable capital efficiencies, validated through multiple portfolio simulations using both real client data and representative dummy portfolios. The first set of changes will go live in January 2026, with a second wave later in the year, reinforcing our commitment to sound risk management and value creation to our clients.
Progress was also made on Euronext’s sponsored access models, scheduled for launch in July 2026. This will provide efficient clearing access for buy-side firms and aligns closely with the market’s growing preference for centrally cleared liquidity.
Meanwhile, deeper integration between MTS, Euronext Clearing and Euronext Securities is creating a streamlined infrastructure, improving netting capabilities and operational efficiency across sovereign markets.
These developments directly reflect the trends highlighted in the ERCC survey: increasing activity in non-core sovereigns, growing appetite for cleared liquidity and a repo ecosystem that is structurally more international.
Competitiveness through alignment
Europe has all the ingredients to be one of the world’s most competitive and resilient capital markets. But competitiveness now depends less on the ambition of regulation and more on the practical integration of market infrastructure.
In a global environment where capital flows to jurisdictions with the most efficient collateral chains, alignment between trading, clearing and settlement is becoming a strategic imperative.
Europe has the scale, sophistication, and expertise required. What is needed now is alignment — between infrastructures, supervisors and market participants — to ensure collateral moves with the speed, transparency and predictability the modern market demands. Euronext remains fully committed to this ambition. As a European market infrastructure with the scale and long-term mandate to support integration, we look forward to progressing this work with our clients and partners in 2026.