IDEAS home Printed from https://ideas.repec.org/p/bca/bocadp/25-14.html
   My bibliography  Save this paper

The Dealer-to-Client Repo Market: A Buoy on a Swaying Sea

Author

Listed:
  • Greg Adams
  • Evan Dudley
  • Jean-Sébastien Fontaine
  • Sofia Tchamova
  • Andreas Uthemann

Abstract

In 2024, the overnight funding market experienced sustained pressure and the benchmark Canadian Overnight Repo Rate Average (CORRA) rose to 7 basis points above the Bank of Canada’s target overnight rate. Settlement balances were declining, but hedge fund borrowing also grew by over $30 billion, increasing the client share of total repo volumes. With limited balance sheets and substantial market power, dealers raised clients’ rates, which increasingly influenced CORRA. Overall, this episode highlights the effect that dealers’ balance sheet constraints and bargaining power have on where CORRA settles but downplays the role of the settlement balances channel in the dealer-to-client market.

Suggested Citation

  • Greg Adams & Evan Dudley & Jean-Sébastien Fontaine & Sofia Tchamova & Andreas Uthemann, 2025. "The Dealer-to-Client Repo Market: A Buoy on a Swaying Sea," Discussion Papers 2025-14, Bank of Canada.
    • Handle: RePEc:bca:bocadp:25-14
    DOI: 10.34989/sdp-2025-14
    as

    Download full text from publisher

    File URL: https://doi.org/10.34989/sdp-2025-14
    File Function: Abstract
    Download Restriction: no
    File URL: https://www.bankofcanada.ca/wp-content/uploads/2025/11/sdp2025-14.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.34989/sdp-2025-14?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bca:bocadp:25-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bocgvca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.