Training Courses > Repo & Collateral

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Repo & Collateral Workshop, (One Day)

The course will cover the following:

A full explanation of the mechanics of buy/sell backs & classic repo
An introduction to the terminology used in repo markets
An explanation of the risks associated with repo transactions
Defining collateral
Risk mitigating techniques
Problems associated with collateral management
Practical structures

Training will be in a workshop format. This will include a mixture of presentation and case study material. The course is designed for up to ten staff.

Below is a summary of the workshop. The content has been placed in a logical sequence and addresses the products, mechanics, methodologies, practical uses and risks.

Morning

Buy/Sell transactions

Review of mechanics
Cash flows
Calculations

Classic repo

Market size growth
Participants
Review of mechanics
Market conventions
Cash flows
Calculations

Repo calculations

Interest basis & conventions
Accrued interest
General collateral
Special collateral
Haircuts
Margin calls
Acceptable collateral & substitution
Early termination & close out

Securities lending

Comparison with repo
Application

Legal and documentational issues

Legal framework
PSA-ISMA Master Agreement

Afternoon

Market users & motives

Securities dealers
Bank treasuries
Corporate treasuries
Fund & money managers
Central banks

Collateralisation

Definition of collateral
The relative merits of collateral
The types of trade that can be collateralised
Why there is growth in collateralisation

The advantages & risks of collateralised trades

Mitigation of credit risk
Correlation risk
Tracking, valuation & calling collateral
Return on capital
Influence on bid/offer spreads

Practical structures

Revaluation method
Break clauses
Add-ons
Third party credit support

End of workshop & review

Related Documents

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Short courses>Repo, central banks and monetary policy

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Learn about the following: How repo works. The terms used in repo transactions. The repo rate and why it changes. The risks of doing repo. How some risks can be reduced. How repo trades can be used.