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Training Courses > Repo & Collateral

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Repo & Collateral Workshop, (One Day)

Enquire or book this course

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.


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


Market users & motives

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


  • 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

Payment RequiredRepo - how it works 100% relevant

15th February 2010

A repo involves two parties. One party, (the seller), gives collateral, normally bonds, to the other party, (the buyer). In return the buyer pays a cash amount to the seller. The cash amount involved is based on the market price of the collateral plus its accrued interest. The seller does a repo, the buyer a reverse repo:

Registration RequiredRepo Training Guide 98% relevant

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Central Banks (CB’s) have the role of maintaining monetary and financial stability, they produce bank notes and supervise banks and insurance companies. Financial stability may require them to act as “Lender of last resort” to commercial banks. In this way, they provide facilities that promote confidence in the banking sector and more widely in the value of money. In many cases they are independent of government however some commentators believe government influences their decisions, not least by having a hand in the appointment of senior central bankers. Several tools are used to conduct policy. These are discussed below.

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Repo trades involve credit risk, market risk, liquidity risk and operational risk the counterparties involved. In the following the term "buyer" refers to the party that receives the collateral at the start of the trade and the term "seller" refers to the party receiving cash at the start of the trade: