Finance & Fury Podcast

Welcome to Finance and Fury, The Say What Wednesday Edition Question from Mark part 2: Can you explain the repo markets that are going on at the moment? Apparently the banks are loaning money from the Feds at 10% so they have enough liquidity to survive the night/Bank run? Announcement – Last SWW ep for the year – Taking a break – Monday eps still going but no Wednesday or Friday episodes Repo market – Or repurchase market – What is it? And why are they done? What this says about the state of the economy A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities Agreement where one party sells Gov Bond they own for cash to another party – and promise to buy it back at a higher price in the near future – the inflated value is the repo rate Active participants in the domestic repo markets are those who deal in Gov Securities – include commercial banks, Central Banks, securities dealers Securities dealers - typically large domestic and international banks/investment