However, there is a growing gap: the importance of collateral quality has risen sharply, and at the same time, high quality and liquid collateral is becoming a limiting factor. Furthermore, the ability to increase debt funding through repo transactions will also be limited by regulatory changes in the future.
Additionally, the ample liquidity provided by the Eurosystem, especially via the two three-year LTROs, together with the enlarged collateral framework for Eurosystem refinancing has led to reduced activity in this market segment, too.