The repurchase agreement market, which slumped after the demise of Lehman Brothers in September last year, is showing signs of recovery as institutions and investors seek secured lending in an attempt to reduce risk.

In the second half of last year repo business suffered a decline in outstanding notional volumes of 29% to €4.6 trillion ($6.4 trillion), according to the International Capital Market Association. Its survey, published in February, revealed this was the most severe reduction since records began in 2001.