Repo-style Transactions
Transactions involving the sale and repurchase ('repo') of assets, purchase and resale ('reverse repo') of assets, as well as securities lending and securities borrowing. The term 'repo-style transaction' is generally taken to refer to any of the following transactions of a bank:
i Sale and repurchase ('repo') of securities — the bank agrees to sell securities to a third party for cash with a commitment to repurchase the securities at an agreed price on an agreed future date.
ii Securities lending — the bank lends securities to a third party and receives either cash or other securities from that party in exchange as collateral.
iii Purchase and resale ('reverse repo') of securities — the bank agrees to acquire securities from a third party for cash, with a commitment to resell the securities at an agreed price on an agreed future date (i.e. the reverse of repo transactions).
iv Securities borrowing — the bank borrows securities from a third party and gives cash or other securities to that party in exchange as collateral.
Added: October 2018