Off balance sheet risk - repurchase agreements.
A repo-to-maturity transaction is a repurchase agreement in which the transferred securities (usually government bonds) mature on the same date the repurchase agreement ends.
Obligation and underlying risk not reported
- "Through the use of RTM transactions borrowers were able to present deals on their balance sheet as sales due to the fact that the assets would not be recovered before they matured.
- The obligation to repurchase these securities was therefore not recorded and the underlying risk was not apparent on the balance sheet."
- The Treasurer, October 2018, p30 - Christopher Howarth, group CFO, Falcon Group.