ECB to Route Securities Lending Through Eurex’s Cleared Repo Market
The European Central Bank will begin routing part of its securities-lending operations through Eurex’s centrally-cleared repo market in the first quarter of 2026, a move that brings the Eurosystem’s collateral-lending activity inside a clearing-house framework for the first time.
Eurex, owned by Deutsche Börse, confirmed that the ECB and national central banks will become members of its cleared repo platform next year. The step follows a sharp expansion in secured-funding volumes across euro money markets: Eurex said outstanding repo balances are about 50 per cent higher than at the end of 2024, with October 2025 posting a record jump in its GC Pooling segment.
The ECB will also join in Paris around the identical time, pointing to a multi-venue approach rather than exclusive reliance on one clearing house.
Since 2015, the ECB and national central banks have lent bonds purchased under the Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) to ease collateral scarcity and prevent settlement failures. Those loans have until now been conducted largely through bilateral and agent-lending channels such as Clearstream’s ASL and ASLplus.
Bringing a share of that activity into a central counterparty, or CCP, standardises risk management and opens the flow of high-quality collateral—Bunds, OATs, BTPs—to a wider pool of counterparties. It also reflects the changing plumbing of the euro money shrinks its balance sheet and policy rates remain positive.
since 2024 mirrors that shift. Banks and purchase-side firms have sought securer, nettable funding routes as quantitative tightening drained liquidity from bilateral channels.
Brussels’ push for “on-shore” clearing
The decision dovetails with the European Union’s long-running effort to deepen domestic clearing capacity later than Brexit. Brussels has pressed banks to reduce their dependence on UK-based CCPs, and the Commission’s 2022 central-clearing review explicitly urged migration of more activity into EU venues.
By joining both Eurex and LCH SA, the ECB signals support for that agenda while avoiding a monopoly. Paris-based LCH SA already clears large volumes of euro government-bond repos, and Eurex has been building market share through its GC Pooling baskets and dedicated “specials” segments.
For dealers, central-bank collateral coming through a CCP offers clear benefits: netting across positions, consistent margining, and access to a broader counterparty set. A CCP interposes itself between purchaviewr and tradeer, managing default risk through daily variation margin—an approach codified under Europe’s EMIR framework for derivatives later than the 2008 crisis.
But market groups including the International Capital Market Association warned that CCP margin and haircut models can amplify stress if they become procyclical. Policymakers will watch closely how Eurex and LCH calibrate their collateral baskets and margin levels once central-bank flows arrive.
What the ECB wants to achieve
The ECB has long said its securities-lending programmes are designed to keep , not to steer funding conditions. Moving into cleared venues should make those operations more transparent and operationally consistent . It may also ease the periodic “specials” squeezes that appear around quarter-ends when collateral is scarce.
Officials have not disclosed what share of Eurosystem lending will be channelled through CCPs, nor the exact fee or haircut schedules that will apply. Those parameters will indicate how aggressively the ECB intends to relieve collateral bottlenecks without distorting repo pricing.
Eurex’s gain could spark renewed competition with LCH SA and Euronext, which announced its own expansion of repo-clearing services earlier this year. Dealers say the ECB’s arrival should lift volumes across the board, potentially accelerating migration from bilateral to cleared trades in line with regulators’ long-term goals.
