Is repo an asset?

Is repo an asset?

In a repo, one party sells an asset (usually fixed-income securities) to another party at one price and commits to repurchase the same or another part of the same asset from the second party at a different price at a future date or (in the case of an open repo) on demand.

What is repurchase agreement Finance?

A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.

What is a tri-party repurchase agreement?

“In a tri-party repurchase agreement, an ‘agent bank’ stands between the dealer and the creditor. A previously negotiated contract among the bank, the dealer, and the creditor describes the acceptable securities and the margins required on the securities.

What is a repurchase agreement (repos)?

An error occurred, please try again. Repurchase agreements (often referred to as “repos”) are transactions in which a transferor transfers a financial asset (typically a high-quality debt security) to a transferee in exchange for cash.

What is a tri-party repo market?

The tri-party repo market is one where securities dealers fund their portfolio of securities through repurchase agreements, or repos. A repo is a financial transaction in which one party sells an asset to another party with a promise to repurchase the asset at a pre-specified later date.

What is a repurchase-to-maturity transaction?

The standard defines a repurchase-to-maturity transaction as “a repurchase agreement in which the settlement date of the agreement to repurchase a transferred financial asset is at the maturity date of that financial asset and the agreement would not require the transferor to reacquire the financial asset” (FASB 2014).