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Surmounting the Onboarding Challenge in All to All Lending Markets

24 July 2017 Securities Finance Monitor

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The idea of starting to trade on a new platform, especially for repo, can seem daunting to the buy-side. In this article, I present the opportunities and challenges for onboarding and trading with non-traditional clients. This is especially relevant for credit departments concerned about new counterparties.

In two previous articles, I pointed out that the drivers behind the shift away from high volume, low margin businesses, like repo, at major money center banks is due in part to the restrictive supplemental leverage ratio. I went on to describe ways in which many buy-side clients have been relegated to lower status in the repo market: they don’t have platinum accounts; have no transactions that are nettable; and are not members of CCPs. These firms are ideally placed to access the market through better collateral and liquidity management, expanded credit appetite, and using All to All (A2A) electronic lending platforms to mitigate the lack of credit intermediation available to them.

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