Spiegazione Repurchase Agreement

THE REPO is a repurchase agreement in which two counterparties agree to carry out two transactions in the opposite direction for the purchase and sale of futures transactions and at specified prices. But used securities are usually U.S. Treasury bonds and are therefore guaranteed by the government. Instead, a plausible explanation would be the fear of granting loans to other banks and companies considered threatened. Indeed, many sectors are in difficulty, such as for example. B corporate debt, consumer credit and energy produced by oil shale, the so-called shale gas. It must be considered that corporate debt, the debt of American companies, alone would exceed $7.5 billion on the brink of risk. In addition, for the first time since the years of the Great Depression, the Fed has begun to move into the interbank market with so-called repurchase agreement (repo) operations. As a rule, these are money market instruments, „fixed-term“ instruments, in which the seller sells for money a certain number of securities to a buyer who undertakes to buy them back at a fixed price and at a given time. They are indeed a kind of very short-term credit, which serves to fill the gaps in monetary policy to respond to urgent payments. In 2007-2008, a race to the futures market, which failed to finance investment banks or very high interest rates, was an important aspect of the subprime mortgage crisis that led to the Great Recession. A sale/redemption is the sale of securities and the date of redemption.

These are two separate transactions in the futures market, one for futures settlement. The futures price is set in relation to the spot price in order to get a return to the market. The basic motivation for the sale/redemption is generally the same as in the case of a conventional repo (i.e. the attempt to benefit from the lower funding rates generally available for secured loans than for unsecured loans). . . .