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How the repo market works
By Cleve Jones, Alistair Gray, Steve Bernard, Cynthia O’Murchu and David Oakley
Published: April 7 2009 18:19 | Last updated: April 15 2009 18:03
The market for so-called repurchase agreements may seem like an obscure area of finance, but it plays a crucial role in allowing financial companies to secure short-term funding.
At its peak, it provided up to a third of the total funding for some banks – including Bear Stearns and Lehman Brothers.
Find out how the market for such agreements, which are known in the trade as repos, is supposed to work – and why it has failed to function as it is supposed to during the financial crisis.
http://www.ft.com/intl/cms/s/0/ff20ada4-2385-11de-996a-00144feabdc0.html#axzz1dt2tbOed
