The re-use of collateral can support the efficient allocation of assets in the financial system. Exploiting a novel proprietary data set, we quantify banks’ collateral re-use at the security level. We show that banks substantially increase their re-use of collateral in response to scarcity induced by the Eurosystem’s asset purchases. Repo rates are less sensitive to purchase-induced scarcity at low levels of re-use when the banking system can more easily supply additional collateral. Elevated re-use rates, in turn, are associated with increased volatility of repo rates.