Current Issues in Economics and Finance

The Repurchase Agreement Refined: GCF Repo®

June 2003Volume 9, Number 6
JEL classification: G19, G29

Authors: Michael J. Fleming and Kenneth D. Garbade

One of the largest and most important of the money markets is the market for repurchase agreements. In a repurchase agreement, a borrower of money effectively agrees to provide securities as collateral to the lender to mitigate credit risk. GCF Repo is a recent innovation in this market that reduces transaction costs, enhances liquidity, and facilitates the efficient use of collateral.

HTML full article
PDF full articlePDF 7 pages / 127 kb
Press release