In September 2025, the Bank of England (BoE) published a Discussion Paper on enhancing the resilience of the gilt repo market. The Discussion Paper was intended to start a conversation with industry on the effectiveness and impact of a range of potential reforms to enhance the resilience of the gilt repo market, including greater central clearing and minimum haircuts on non-centrally cleared transactions.

Feedback

On 1 April 2026, the BoE published a Feedback Statement to the Discussion Paper which summarises the feedback from the industry under the following headings:

  • Characteristics of gilt repo market.
  • Greater central clearing: potential benefits, risks, and trade-offs with market liquidity.
  • Minimum haircuts on non-centrally cleared gilt repo transactions: potential benefits, risks and trade-offs with market liquidity.
  • Other potential measures to enhance gilt repo market resilience.

Next steps

The BoE states that further action is needed to deliver structural improvements to the resilience of the gilt repo market. As such it will therefore continue monitoring developments in market structure and participants’ behaviour and further consider the benefits and costs of potential market structure reforms.

Specifically, the BoE will continue to consider potential reforms to enhance the resilience of liquidity provision in stress, continuing to work in collaboration with the Financial Conduct Authority, with input from HM Treasury and the UK Debt Management Office. These include exploring changes in market structure that would enable the greater adoption of central clearing in the future, as well as exploring how the obstacles to greater adoption identified by respondents could be overcome. The BoE will also explore changes in market structure that would support more prudent risk management practices and margining in the non-centrally cleared gilt repo market to enhance system-wide resilience. Additionally, as part of further work in this space, the BoE will seek to draw on industry expertise and data to quantify the potential impact of any market structure reforms on market liquidity.

The BoE will progress with this work over the course of 2026 and intends to publish a comprehensive update, including potential policy proposals, in early 2027. The BoE will announce any potential policies with adequate notice and sufficient implementation timelines to ensure that all market participants have sufficient time to input into the design of, and prepare for, any proposed changes.

The BoE will also continue to work with other UK and international authorities to progress initiatives that could enhance the resilience of the gilt repo market. As part of this, the BoE will consider any international developments in this space, including the implementation of the securities financing transactions haircuts framework and the Financial Stability Board recommendations around leverage in non-bank financial intermediation and liquidity preparedness for margin and collateral calls.