Citi bucks the repo trend

Citi Building Sign

Citigroup had one of its most profitable years in recent history in the repurchase-agreement market, the bank’s global head of fixed-income finance said, countering much of the industry grumbling that regulation is crushing this business.

Bloomberg News reports that Greg Markouizos said that 'for the first time in many, many years I can see an upward slope of earnings for our business going forward'. 

Speaking in Luxembourg, he offered a much more optimistic outlook for the repo market, where bonds are used as collateral for short-term loans, than the “doom and gloom” scenario he feared as recently as last year. Banks can boost profits by increasing repo-lending spreads without losing the clients, he said.

The repo market is under pressure from regulation crimping banks’ balance sheets. Dwindling volumes raised their concern that liquidity will be diminished in the cash-bond market, eventually leading to higher interest rates for government-debt issuers. 

To access the complete Bloomberg News article hit the link below:

Citigroup Bucks Repo Gloom With One of Most Profitable Years

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