Open market operations and Opening leg: Difference between pages

Revision as of 15:51, 25 June 2017

Repurchase agreements

A securities repurchase agreement ('repo') involves a pair of trades with the same counterparty in the same security.

The second trade reverses the initial sale and purchase, but at a later date and different price.

The opening leg is the first trade in the repo.

It is also known as the starting, first, near, or onside leg.

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-(OMOs or OMO).
+''Repurchase agreements''
-The buying or selling of financial securities in the open market by a central bank to influence the amount of money  in circulation.
+A securities repurchase agreement ('repo') involves a pair of trades with the same counterparty in the same security.
+The second trade reverses the initial sale and purchase, but at a later date and different price.
-The range of instruments used by central banks has tended to increase following the financial crisis early in the 21st Century.
-For example, the European Central Bank operates through Euro-member states' National Central Banks (NCBs). It lists as available to an NCB "reverse transactions" that are applicable on the basis of repurchase agreements or collateralised loans, outright transactions, issuance of debt certificates, foreign exchange swaps and collection of fixed-term deposits.
+The opening leg is the first trade in the repo.
+It is also known as the starting, first, near, or onside leg.
 == See also ==
-* [[Bank of England]]
+* [[Closing leg]]
-* [[Central bank]]
+* [[Near leg]]
-* [[Monetary policy]]
+* [[Repo rate]]
-* [[POMO]]
+* [[Repurchase agreement]]
+[http://www.treasurers.org/repos  ACT briefing note: Practical steps to investing in Repos ]