Amidst a general decline of repo market trading at the peak of the crisis, some euro area CCPs actually saw an increase of volumes. This happened because CCPs provide effective protection against counterparty risk by interposing themselves between the original repo parties.
From a financial stability perspective, properly supervised and overseen CCPs act as a firewall against the propagation of default shocks and can mitigate counterparty credit risk, enhance market transparency, facilitate collateral liquidation, and foster standardisation of repo terms and eligible collateral. There is also the advantage that policy makers can monitor the cleared repo markets since CCPs are regulated institutions.