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1 posts on "Dealers"
September 29, 2026

Follow the Cash! Microstructure of Repo Markets

Gara Afonso, Jun-Davinci Choi, Gonzalo Cisternas, and Will Riordan

Illustration of a tag cloud in a circle with a large question mark. Some of the words are Federal Reserve, Dealer, Money Market Fund, Cash, Repo Market, Securities.

The repo market in the U.S. is a mosaic of segments with distinct participants and various settlement and clearing practices. Why do large cash lenders typically settle their trades through a third-party agent? Why does the interdealer market clear through a central counterparty? Why do levered investors favor bilateral trades? In the second post of this series, we follow the cash as it navigates through repo markets to better understand the costs and benefits that shape the existing market structures.
 

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Posted at 7:00 am in Dealers, Financial Intermediation, Liquidity, Repo | Permalink | Comments (0)

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