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 March 4, 2002 Launch of EUREPO, the New Benchmark for Secured Money Market Transactions The European Banking Federation (FBE), the European Savings Banks Group (ESBG), the European Association of Cooperative Banks (EACB), in cooperation with the European Repo Council (ERC) announced today the launch of EUREPO, which is positioning itself as the benchmark for secured money market transactions in the euro zone, the reference rate for the 2.298 trillion euro repo market that has emerged, subsequent to the introduction of the Euro in 1999. A repo agreement is a transaction in which one party sells securities to another, while at the same time committing itself (as part of the same transaction) to re-purchasing identical securities, on a specified date at a specified price. The market needs a representative benchmark, as the advent of the Euro has led to an increasingly homogeneous Euro-denominated General Collateral ('GC') market. EUREPO is based upon contributions from a panel of 38 banks, which are active in cross border EUREPO GC repo trading and/or which represent a particular market segment in the EUREPO GC repo market. The contributors will apply a strict Code of Conduct, drawn up by the European Credit Sector Associations, which will ensure a transparent and efficient management of the panel of banks. A Steering Committee, composed of nine recognized market practitioners and the Secretary General of the FBE, will oversee compliance with the Code of Conduct and monitor market developments. As of today, EUREPO will be set and publicised at 11.00 am CET on each TARGET day, with the technical support of Moneyline Telerate, thus providing risk managers with a solid base for the daily evaluations of the positions of the front office. EUREPO will undoubtedly rapidly become a credible and established benchmark, enabling swap traders to enter into basis swaps between Euribor and Eurepo, thereby eliminating a large part of GC vs. Euribor risk inherent in swap portfolios. "EUREPO is a perfect complement to EURIBOR, and we sincerely hope it will be just as successful" said the Secretaries General of the three European Credit Sector Associations.
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