ICMA Consults On Role Of Repo In Sustainable Finance04.26.2021
The ICMA European Repo and Collateral Council (ERCC) has published a consultation paper on the role of repo in green and sustainable finance, exploring the sustainability aspects of repo and collateral as well as assessing the existing opportunities and potential risks in this area. In particular, the paper looks at the different possible intersections between the repo and collateral market and sustainable finance: 1. Repo with green and sustainable collateral; 2. Repo with green and sustainable cash proceeds and 3. Repo between green and sustainable counterparties.
🌿The @icmagroup ERCC (European repo and collateral Council) published today a consultation paper on the role of repo in green and sustainable finance.
— ICMA (@ICMAgroup) April 22, 2021
The paper has been published alongside a list of consultation questions and is intended to serve as a starting point for promoting a broader discussion in the repo community on sustainability. It reflects the complexity of the topic and the variety of views.
ICMA invites all interested stakeholders to respond and comment on the paper by filling in our online survey which will be open until 28 May 2021. The results will help the ICMA ERCC to identify areas of focus going forward and help to frame future workstreams, if required.
Clients can agree collateral on a real-time basis and increase efficiencies.
Margin and collateral are a new use case for bond ETFs.
Banks want centralisation of their collateral pools and a singular approach to optimisation.
OSCAR reduces the time to set up and negotiate an individual collateral basket from weeks to hours.
Proposal involves a real-time margining system combined with auto-liquidation.