ICMA Shares Recommendations to Enhance Gilt Repo Market Resilience with the Bank of England

Why It Matters

A more robust gilt repo market reduces systemic risk in sovereign financing and safeguards liquidity for both banks and non‑bank participants. Implementing the recommendations can enhance financial stability and market confidence in the UK.

Key Takeaways

• ICMA submitted a detailed resilience report to the Bank of England
• Calls for better supervision of leveraged investor strategies in gilt repo
• Recommends expanded central clearing for non‑bank participants
• Suggests coordinated data sharing between BoE and FCA
• Proposes modernised collateral eligibility and settlement processes

Pulse Analysis

The gilt repo market is a cornerstone of UK sovereign financing, allowing dealers to obtain short‑term funding against Treasury securities. Recent volatility and the BoE’s 2025 consultation highlighted gaps in supervision, data aggregation, and clearing infrastructure. By convening a closed‑door roundtable, ICMA gathered insights from market participants to craft a roadmap that addresses these vulnerabilities and aligns with broader regulatory reforms.

ICMA’s recommendations focus on three pillars: transparency, resilience, and accessibility. Enhanced supervisory understanding of leveraged investor strategies aims to curb concentration risk, while a systematic stock‑take of reporting frameworks seeks to close data blind spots that hinder timely oversight. Targeted counter‑party disclosures and coordinated information‑sharing between the BoE and FCA would give regulators a clearer view of interconnected exposures. Crucially, expanding central‑clearing eligibility to non‑bank participants and standardising collateral eligibility promise to broaden market depth and reduce reliance on bilateral arrangements.

If adopted, these measures could fortify the gilt repo market against future stress events, supporting smoother liquidity flows and more efficient settlement. For banks, asset managers, and other market participants, the reforms translate into lower funding volatility and clearer regulatory expectations. Moreover, the collaborative approach underscores the value of industry bodies like ICMA in shaping policy that balances stability with market innovation, a dynamic that will be pivotal as the UK navigates post‑Brexit financial reforms.