31 posts on "Repo"
May 13, 2015
Financial Innovation: Evolution of the Tri‑Party Repo Arrangement
In our earlier post, we described how the tri-party repo arrangement was a clever way to reduce the costs and risks that individual firms faced when settling bilateral repos.
June 9, 2014
What’s Your WAM? Taking Stock of Dealers’ Funding Durability
One of the lessons from the recent financial crisis is the need for securities dealers to have durable sources of funding.
August 19, 2013
Are Higher Haircuts Better? A Paradox
Brian Begalle, Adam Copeland, Antoine Martin, Jamie McAndrews, and Susan McLaughlin Repurchase agreement (repo) markets played an important role in the 2007-09 financial crisis in the United States, and much discussion since then has focused on the role of repo haircuts. A repo is essentially a loan collateralized by securities. Typically, the value of the […]
July 17, 2013
Magnifying the Risk of Fire Sales in the Tri‑Party Repo Market
The fragility inherent in the tri-party repo market came to light during the 2008-09 financial crisis.
September 17, 2012
The Odd Behavior of Repo Haircuts during the Financial Crisis
Since the financial crisis began, there’s been substantial debate on the role of haircuts in U.S. repo markets.
June 25, 2012
Mapping and Sizing the U.S. Repo Market
The U.S. repurchase agreement (repo) market is a large financial market where participants effectively provide collateralized loans to one another.
February 29, 2012
Is Risk Rising in the Tri‑Party Repo Market?
At the New York Fed, we follow the repo market closely and, with some of my colleagues, I’ve tried to keep readers of this blog informed about how the market works, how it’s being reformed, and what risks remain.
November 7, 2011
Remaining Risks in the Tri‑Party Repo Market
The tri-party repo market is one in which large U.S. securities firms and bank securities affiliates (dealers) finance much of their fixed-income securities inventories.
October 18, 2011
Just Released: Money and Payments Workshop Examines Repo Market Reform
We have just posted the proceedings of a workshop held on October 7, 2011, which gathered the very latest thinking by academics, central bankers, and practitioners on how the repo market should be reformed to help avoid a recurrence of the recent financial crisis.
July 20, 2011
Stabilizing the Tri‑Party Repo Market by Eliminating the “Unwind”
On July 6, 2011, the Task Force on Tri-Party Repo Infrastructure—an industry group sponsored by the New York Fed—released a Progress Report in which it reaffirmed the goal of eliminating the wholesale “unwind” of repos (and the requisite extension of more than a trillion dollars of intraday credit by repo clearing banks), but acknowledged unspecified delays in achieving that goal. The “unwind” is the settlement of repos that currently takes place each morning and replaces credit from investors with credit from the clearing banks. As I explain in this post, by postponing settlement until the afternoon and thereby linking the settlement of new and maturing repos, the proposed new settlement approach could help stabilize the tri-party repo market by eliminating the incentive for investors to withdraw funds from a dealer simply because they believe other investors will do the same. In effect, eliminating the unwind can reduce the risk of the equivalent of bank runs in the repo market, or “repo runs.”
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