When everyone’s panicking about money, trading in one of the world's biggest markets actually gets cheaper. It’s like the system's own airbag.
March 27, 2026
Original Paper
Repo market networks: dynamics under financial stress
SSRN · 6471700
The Takeaway
Standard economic logic suggests that stress leads to higher spreads and less efficiency. However, transaction-level data from the euro repo market shows that during stress episodes, the network's core-periphery structure intensifies and spreads decrease, keeping the financial plumbing functional when it's needed most.
From the abstract
The smooth functioning of the repo market is essential to financial stability. However, the market has faced repeated episodes of stress in recent years. This paper examines the resilience of the euro-denominated repo market during recent episodes of elevated financial stress, drawing on transaction-level data and applying network analysis. The institutional repo network displays a core–periphery structure, with connectivity intensifying during stress periods. At the sectoral level, trading volu