ESMA publishes first overview of EU securities financing transactions markets

Summary:

The European Securities and Markets Authority (ESMA) has published its market report on the EU Securities Financing Transactions (SFT) markets. The report provides an overview of the EU repo market, monitoring repo market developments and providing key risk metrics for its monitoring framework on SFTs. The main findings of the report are:

The total outstanding exposure of SFTs was EUR 9.8 trillion in September 2023, with 68% of this being repo transactions.
Banks are the major participants in repo markets, with 52% of repo amounts.
The report highlights cross-border linkages, with 41% of repo amounts observed between EEA (European Economic Area) counterparties, and strong links with the UK.
The report also discusses clearing and settlement, repo collateral use, and repo haircuts.

This report provides a comprehensive overview of the EU repo market, contributing to ESMA's financial stability objective by monitoring repo market developments and providing key risk metrics for its monitoring framework on SFTs.

(Note: The above summary is a gist of the provided document and is based on the information provided.)