EU Commission joins Eurex’s repo market

The EU Commission (EC) is the latest member to join the Eurex Repo segment bringing the number of participants to 165 - including 10 Supranational Institutions and Agencies as well as 5 central banks such as Deutsche Bundesbank. Both institutions announced today that the EU Commission is ready to trade and clear repo transactions at Eurex. This is a major milestone for Eurex as both a leading marketplace for derivatives and repo trading and at the same time one of the leading clearing houses globally, to become the incumbent marketplace for trading and clearing of euro-denominated repo and derivatives transactions.

It also delivers on the Commission’s announcement in December 2022 to develop the market infrastructure for EU bonds by implementing a repo facility. It is a further milestone in improving the market infrastructure for EU bonds which will support the use of EU bonds as collateral as well as the overall liquidity of EU bonds in secondary markets.

The European Commission was welcomed as a market participant during today’s Bell Ringing ceremony on the iconic trading floor of the Frankfurt Stock Exchange under the presence of European Commissioner Johannes Hahn, President Dr. Joachim Nagel of Deutsche Bundesbank and Burkhard Balz, Member of the Executive Board of Deutsche Bundesbank.

Further enhancement of secondary market liquidity of EU debt

Under its unified funding approach, the European Commission decided end of 2022 to create a liquid curve of large benchmark bonds, branded “EU-Bonds”, rather than separately denominated bonds for individual programs. Since then, the Commission developed the ecosystem for EU bonds further, e.g. by implementing the European Issuance Service and quoting arrangements for electronic trading platforms. The EU's total debt outstanding now stands at over EUR 560 billion, making them the 5th largest issuer within the EU27 member states.

The onboarding of the EU Commission once again demonstrates the substantial opportunities in European repo markets. Germany’s central bank, Deutsche Bundesbank, has been selected as General Clearing Member by the European Commission. 

Eurex to support the Commission’s unified funding approach

Eurex’s business segment for trading and clearing repos significantly enhances the overall efficiency of financial markets by ensuring the smooth operation of the government bond market and other securities markets. With its unique value proposition, Eurex stands as the ideal partner to support the European Commission’s objective of creating a liquid EU bond market. Eurex’s cross-market and balance sheet netting capabilities deliver market-wide efficiencies, ultimately bolstering the liquidity of EU bonds. Furthermore, Eurex’s euro-dominated cross-product strategy, which integrates bonds, repos, and linked derivatives within a single clearing environment, is poised to further enhance this contribution through the planned expansion of its cross-product margining capabilities. This comprehensive approach not only fosters efficient and liquid markets but also significantly advances the development of a robust EU bond market.

Erik Müller, CEO, Eurex Clearing AG: “We welcome the EU Commission and fully support its unified funding approach. We are proud to be the Commission’s partner for trading and clearing of repo transactions in EU debt securities complementing our broad range of clients.”

Johannes Hahn, European Commissioner for Budget and Administration: “The European Commission’s objective is to strengthen the European capital markets and ensure financial stability and their sovereignty. Today I am very happy that we joined Eurex Repo as a market participant. We need a liquid EU bond market and Eurex is a great partner to achieve it.”

Dr. Joachim Nagel, President of Deutsche Bundesbank: “Acting as a General Clearing Member at Eurex for several public entities for many years, the Bundesbank brings experience to the table. With this robust track record, we are happy to provide our services to the Commission. I look forward to implementing our newly established partnership and the benefits it will bring to our financial system.”

About Eurex

Eurex is the leading European derivatives exchange and – with Eurex Clearing – one of the leading central counterparties globally. As architects of trusted markets characterized by market liquidity, efficiency, and integrity, we provide our customers with innovative solutions to seamlessly manage risk. 

About EU Commission

The European Commission is the EU’s politically independent executive arm. It is alone responsible for drawing up proposals for new European legislation, and it implements the decisions of the European Parliament and the Council of the EU. The European Commission is empowered by the EU Treaties to borrow from the international capital markets on behalf of the European Union to finance selected EU policy programmes. It is a well-established name in debt securities markets, with a track record of bond issuances over the past 40 years. All issuances executed by the European Commission are denominated exclusively in euro. All EU borrowing is guaranteed by the EU budget, and contributions to the EU budget are an unconditional legal obligation of all Member States under the EU Treaties.

Media contacts: 
Niels Tomm 
+49 172 3009640
niels.tomm@deutsche-boerse.com

Fabian Vichtl
+49 69 211-1 65 95
fabian.vichtl@deutsche-boerse.com

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Editorial note: Please find here high-resolution photos of Johannes Hahn, Erik Müller and Dr. Joachim Nagel.