Join Mailing List

For latest news and information about Treasury and Financial Markets, enter your details below:

Repo - how it works

Sub-menu:

Print Preview Send to a Friend Share

Published: 15th February 2010 by William Webster

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:

Register for free or login to view the full publication

Related Documents

Free to ViewTraining Courses > Repo & Collateral 100% relevant

Free to ViewShort courses>Repo, central banks and monetary policy 100% relevant

Registration RequiredMonetary policy 100% relevant

25th March 2017

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.

Registration RequiredRepo Training Guide 100% relevant

Registration Requiredelearning > Repurchase agreements (repo) 100% relevant

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.

Registration RequiredReverse repo 100% relevant

22nd February 2010

There are two parties to a repurchase transaction (repo). The party that provides (sells) the collateral is doing a repo. The party that takes (buys) the collateral is doing a reverse repo. Let's see this in a diagram: