The firm is hoping to create a bigger repo market in China.
The 
Industrial and Commercial Bank of China (ICBC) reports that it has joined the tri-party repo service of Clearstream, a Deutsche Börse Group post-trade services provider, and the firm wants this first step to be the start of a greater repo market in China.
“ICBC is the first Chinese financial institution to do so, enabling clients to participate in tri-party repo under title transfer with offshore counterparties. This marks a significant step in strengthening the Chinese repo market with a secure and efficient tri-party offering, enhancing its attractiveness and fostering further growth,” according to the announcement.
“The repo market is essential for liquidity management within China’s financial system, serving as a vital funding source for institutions. Globally, and especially among central banks, commercial banks, corporates, hedge funds, and asset managers, tri-party repos are becoming increasingly popular. They offer an attractive balance of high safety and potential for greater returns compared to traditional money market instruments and bilateral repos,” officials say.
“We are happy to cooperate with Clearstream to be the first Chinese bank joining the tri-party repo business. Tri-party repo, by tapping into the collateral management service of third-party professional institutions such as Clearstream, provides higher efficiency and lower counterparty risk in the repo market,” says Hailu Wang, general manager of the global markets department of ICBC, in a prepared statement. “Looking into the future, we would like to join hands with financial peers to promote together the development of the repo market in China.”
The partnership with ICBC “represents a key milestone in bringing innovative tri-party repo solutions to China,” says Philip Brown, CEO at Clearstream Banking S.A., in a statement.
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