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RBA Glossary definition for repo

repo – Repurchase agreement. The vehicle whereby most Reserve Bank of Australia (RBA) domestic market operations are conducted. Repurchase agreements (usually called 'repos') involve the sale or purchase of securities with an undertaking to reverse the transaction at an agreed date in the future and at an agreed price. Repos provide flexibility in that they allow the RBA to inject liquidity on one day and withdraw it on another with a single transaction.

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Emergency Liquidity Injections

10 Oct 2019 RDP 2019-10
Nicholas Garvin
This paper compares the effectiveness of different forms of emergency liquidity injections, including secured lending (repo), unsecured lending and securities purchases. ... ex post. outcomes. The model demonstrates that lending to banks via repo can
https://www.rba.gov.au/publications/rdp/2019/2019-10.html

The Model

9 Oct 2019 RDP 2019-10
Nicholas Garvin
i. (1 r. u. ), where r. u. > 0. Secured lending (also called repo) (R,(r.
https://www.rba.gov.au/publications/rdp/2019/2019-10/the-model.html

References

9 Oct 2019 RDP 2019-10
Nicholas Garvin
Gorton G and A Metrick (2012), ‘Securitized Banking and the Run on Repo’, The Journal of Financial Economics, 104(3), pp 425–451. ... Hordähl P and MR King (2008), ‘Developments in Repo Markets during the Financial Turmoil’, BIS Quarterly
https://www.rba.gov.au/publications/rdp/2019/2019-10/references.html

Introduction

9 Oct 2019 RDP 2019-10
Nicholas Garvin
The largest provisions were implemented with secured lending (i.e. repo) via central banks' market operations and with government guarantees on banks' unsecured debt issuance.
https://www.rba.gov.au/publications/rdp/2019/2019-10/introduction.html

Appendix A: Emergency Liquidity Injection Policies in Europe and the United States

9 Oct 2019 RDP 2019-10
Nicholas Garvin
In mid September 2008, the Fed widened its acceptable collateral for the PDCF – from investment-grade securities to those typically accepted in private repo markets – and the TSLF – from certain types
https://www.rba.gov.au/publications/rdp/2019/2019-10/appendix-a.html

Emergency Liquidity Injections

1 Oct 2019 RDP 2019-10
Nicholas Garvin
The largest provisions were implemented with secured lending (i.e. repo) via central banks' market operations and with government guarantees on banks' unsecured debt issuance. ... i. (1 r. u. ), where r. u. > 0. Secured lending (also called repo) (R,(r.
https://www.rba.gov.au/publications/rdp/2019/2019-10/full.html

Liquidity Injection through Secured Lending

9 Oct 2019 RDP 2019-10
Nicholas Garvin
This principle was arguably followed in 2008 and 2009, when many central banks substantially widened the range of repo-eligible collateral, after private markets for those securities dried up.
https://www.rba.gov.au/publications/rdp/2019/2019-10/liquidity-injection-through-secured-lending.html