At the ICMA conference on 28 May 2026, Samara Cohen, global head of market development at BlackRock, laid out an agenda to accelerate market evolution, better manage liquidity and thereby reduce systematic stress when markets face overbearing volatility.
“We need a broader pool of high-quality collateral that can be used efficiently, and we need it to move faster,” she said. “When firms cannot mobilise collateral, their only option is to sell assets, which amplifies stress across the system.”
The reforms set out after the global financial crisis, Cohen argued, strengthened the core of the system. But they also introduced a structural vulnerability: in periods of sharp price falls, the demand for cash rises across the system at precisely the same moment, where cash buffers are needed to offset risk in derivatives positions, used as insurance by investors.
“We hard-wired volatility to system-wide cash demand,” she noted. “In periods of sharp price falls, margin requirements rise across the system at the same time. And because we did not build sufficient capacity to absorb that demand, margin calls can translate quickly into forced asset sales.”
These big directional trades can drive down asset values, including those of government bonds. As these are often either used directly as collateral, or via a repo trade as an exchange for cash in the short term, with the cash then used as collateral, a downward spiral can occur – and did in the UK’s LDI crisis in 2024.
“Repo is the system’s original pressure valve,” she said. “It allows participants to access liquidity without selling assets outright.”
This is an ‘engine’ problem. In the US the Securities and Exchange Commission’s mandate for broader central clearing of Treasury repo has been framed in exactly these terms: a more diverse participant base, better netting, and lower barriers for buy-side firms to participate directly is making repo more reliable and efficient. Europe, Cohen suggests, needs to make a similar journey.
“In Europe, repo capacity remains constrained,” she said. “Strengthening it, making it deeper and more agile, is essential to ensuring the broader system can function effectively under stress. Without this, the other valves cannot fully do their job.”
The implications for fixed income trading more broadly are significant. Dealers’ ability to quote tight prices in bond markets depends directly on their capacity to finance positions cheaply and reliably.
Tokenisation is the technology most frequently cited as the mechanism through which settlement can be accelerated, collateral mobilised more efficiently, and markets broadened to new participants.
“Tokenisation is often framed as a new asset class; it is not,” said Cohen. “It is a change in how ownership is recorded, transferred, and managed … If tokenised instruments operate with different legal treatment, different liquidity pools, or different pricing dynamics, we risk fragmenting markets rather than improving them.”
Interoperability between tokenised systems will be key, she observed, and creates great opportunities for markets in which this is established for ‘digital money’ as this will potetntially support markets against the stresses she had outlined earlier.
“Can [digital money] move into existing collateral frameworks under the same eligibility criteria, without
a parallel rulebook?” she asked. “Is the price relationship between tokenised and traditional versions of an asset coherent, with any divergence observable and measurable? When we can answer yes to all of these, tokenisation stops being a parallel experiment and becomes the next layer of market infrastructure, deeper, faster and more connected than what came before.”
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