The Bank of England is considering wider central clearing and minimum haircuts in gilt repo. Its diagnosis is uncomfortable: around half of bilateral gilt-repo trades routinely carry zero haircuts, and hedge-fund repo often does too. AIMA’s objection is that mandatory clearing or badly calibrated haircuts could make funds migrate from typical two-week financing to daily borrowing, increasing rollover risk. Net gilt-repo borrowing is around £200 billion, about £85 billion of it by hedge funds. Both sides may be right. More initial collateral can damp leverage, while daily liquidity calls can create a sharper cliff. The investable question is not “clearing good or bad”; it is whether financing becomes safer in aggregate while more procyclical at the margin. Bank of England · Reuters