Repurchase Agreement Ezb

A repurchase or repurchase agreement is a financial transaction, the simultaneous sale and subsequent repurchase of a good security. This is a real pension transaction, for which the seller`s right of ownership of the property is transferred to the buyers. The buy-back agreement is a short-term financial instrument of a duration usually between one day (then also known as overnight pension) and one year. A pension transaction (repo) is a two-legged operation akin to a secured loan. A cash borrower sells securities (the collateral) to the lender and agrees to buy them back at a predetermined price2 Cash borrowers are asset managers, pension funds and insurance companies. Money lenders and corporate treasurers are typical lenders of cash. Deposits are provided by large broker traders, who are also important pension users to finance market-creating stocks, to obtain short-term financing or to invest cash. Renusor transactions may be either bilateral or authorized through a central counterparty.3 In the case of a repurchase transaction, two parties: a buyer and a seller of a security. The buyer considers himself a lender, the seller as a borrower. As buyers, banks, but also non-bank banks such as investment firms and hedge funds. Sellers are often money funds, asset managers or other banks.

Like financial instruments, the costs of re boarding operations in the form of interest or spread. Previous technical term: Repo | Next term: Reseating operations The ECB publishes the average monthly credit balance for the Eurosystem and daily assets online, as well as breakdowns by type of security (securities or cash). The data is published every three Mondays of the month for the previous month. The effective spread is calculated on the basis of the transactions executed (as opposed to the market order book) according to the following formula: ∆ri-1 refers to the difference in pension rate between two consecutive transactions of security c per day t. The code roll assumes that subsequent bookings come from the same order book. Therefore, when adjusting to the repurchase market, we use transactions with the same specific guarantee as the guarantee, and then calculate the weighted average in the segment: , Ct refers to the group of securities traded within the segments of the day t.