A tale of two markets: Treasury and equity financing

Research evidence excerpt

A tale of two markets: Treasury and equity financing

Cross Asset Research

23 June 2026

Cross-Asset Research

A tale of two markets: Treasury

and equity financing

The recent rise in equity financing costs as Treasury repo Samuel Earl(i)

remains soft reflects a divergence in which balance sheet + 1 212 526 5426

samuel.earl@barclays.com

constraints are binding across markets. SLR relief has BCI, US

expanded Treasury capacity, while equity repo is capital and Amrut Nashikkar(i)

liquidity intensive. That means the decoupling can persist. +1 212 412 1848 amrut.nashikkar@barclays.com

BCI, US

• US funding markets: Equity funding costs have surged, while money market conditions

Global Equity Derivatives Strategy

remain relatively benign. We view this divergence as reflecting different binding constraints

Stefano Pascale

on bank intermediation. UST repo is a leverage-intensive activity, but with SLR reform for the +1 212 526 7983

US GSIBs earlier this year, there is ample leverage capacity available. While equity financing stefano.pascale@barclays.com

also consumes leverage, we see capital, liquidity, and counterparty constraints as limiting BCI, US

financing capacity in the current environment. With equity prices rising sharply and new

Anshul Gupta

issuance likely requiring new financing, that capacity is being consumed more aggressively. +44 (0) 20 7773 0430

Proposed changes under Basel III and GSIB scores are unlikely to alleviate pressures in equity anshul.gupta@barclays.com

financing, in our estimation. As capital grows more slowly, we expect these pressures to Barclays, UK

persist in the near term, barring a correction in equities, even as broader money market

Zhiyuan Fan

conditions remain benign. +1 212 526 5530

zhiyuan.fan@barclays.com