from The American Heritage® Dictionary of the English Language, 4th Edition
- n. Informal A repurchase agreement.
- n. Informal Repossession of merchandise or property from a buyer who has defaulted on payment.
- n. Informal Repossessed merchandise or property.
from Wiktionary, Creative Commons Attribution/Share-Alike License
- n. repossession
- n. A repurchase agreement: a type of derivative which allows a borrower to use a financial security as collateral for a cash loan at a fixed interest rate
- n. A source code repository.
A repo is short for a repurchase agreement where collateral is exchanged for cash.
For example, the current 10-year note auctioned earlier this month was traded Friday with a term repo rate of 1.75% through March 17.
The new extended collateral-term repo facility has been established to offer sterling to banks for 30 days in exchange for a wide range of collateral, if liquidity conditions for trade in sterling deteriorate.
The author claims a GPL3 license, but only binaries are available; the svn repo is empty.
But that was before the ECB opened its €500bn credit facility, the "long-term repo operation".
"Sophisticated counterparties were encouraged to provide short-term repo funding, collateralized by securities that turned out to be very illiquid, such as various asset-backed securities," he said.
The shortterm repo-rates and reverse reporates were also kept unchanged at 7.75% and 6% respectively.
One trader said conditions in the credit default swap market and the short-term repo markets are more stable today than they were in March, when Bear Stearns nearly collapsed, but still, "if they go into liquidation," it is going to be a bad situation on Monday.
The Fed has already announced several initiatives to provide additional liquidity to the MBS market, including expanded, longer-term repo operations in which bond dealers pledge MBS to borrow short-term funds from the Fed.
As of June 27, term repo borrowing outstanding was at $3.7 trillion, up from $2.5 trillion in the first week of April, according to Mr. Goncalves.