2) The cash payable when the bank`s liquidity hedging ratio (LCR) and internal stress tests are purchased. The LCR requires banks to have sufficient liquid resources to guarantee short-term and short-term debt. Some observers have indicated that the LCR is resulting in an increase in demand for reserves. However, past and present regulatory authorities point out that the CRA probably did not contribute to the volatility of the repo market, as treasury bills and reserves for the definition of high-quality liquid assets are treated on the same level in the regulation. A reverse buyback contract (Reverse repo) is the mirror of a repo transaction. In a reverse, a party buys securities and agrees to resell them later, often the next day, for a positive return. Most deposits are overnight, although they may be longer. The buy-back contract, or «repo,» the market is an opaque but important part of the financial system, which has recently attracted increasing attention. On average, $2 trillion to $4 trillion in pension transactions are traded every day — guaranteed short-term loans.
But how does the pension market work, and what about it? The parties agree to cancel the transaction, usually the next day. This transaction is called a reverse repurchase agreement. The financial institution that acquires the guarantee cannot sell it to another party unless the seller has not fulfilled its obligation to repurchase the guarantee. The transaction guarantee serves as a guarantee to the buyer until the seller can repay the buyer. Indeed, the sale of a security is not considered a real sale, but as a secured loan secured by an asset. A pension contract (repo) is a short-term sale between financial institutions in exchange for government securities. Both parties agree to cancel the sale in the future for a small fee. Most depots are available overnight, but some can stay open for weeks. They are used by companies to raise funds quickly. They are also used by central banks. The cash paid on the initial sale of securities and the money paid at the time of the repurchase depend on the value and type of security associated with the pension. In the case of a loan.
B, both values must take into account the own price and the value of the interest accrued on the loan. Like many other corners of finance, retirement operations contain terminology that is not common elsewhere. One of the most common terms in repo space is «leg.» There are different types of legs: for example, the part of the retirement activity that originally sells security is sometimes called «starting leg,» while the subsequent buyback is the «close leg.» These terms are sometimes replaced by «Near Leg» or «Far Leg.» Near a repo transaction, security is sold. In 2008, attention was drawn to a form known as Repo 105 after the Lehman collapse, because it was claimed that Repo 105s had been used as an accounting ploy to mask the deterioration of Lehman`s financial health. Another controversial form of buyback order is the «internal repo,» which was first highlighted in 2005. In 2011, it was proposed that, in order to finance risky transactions on European government bonds, Rest could have been the mechanism by which MF Global endangered several hundred million dollars of client funds before its bankruptcy in October 2011. Much of the deposit guarantee is obtained through the re-library of other customer security.   Essentially a secured loan, a repot is a kind of securities financing transaction. In some markets, it is also called a sales and repurchase contract. The main use of the Repo is the registration and loan of cash. Although the transaction is similar to a loan and its economic effect is similar to a loan, the terminology is different from that of the loans: the seller legally buys the securities from the buyer at the end of the loan period.