The securities repurchase market is the sum of the bondholders to sell bonds at the same time, signed an agreement with the buyer, agreed to buy back certain period of time and price with the The securities repurchase market A sum of bond financing.
The securities repurchase market is a short-term financial products market, with the interbank market and paper market has posed a fundamental component of the money market. Repurchase the securities known as repurchase agreements, is the stock market leveraged long and short of market instruments. Access to funds through repurchase operations, purchase of other securities, repurchase party to bear the risk of securities price fluctuations; On the contrary, returned to sellers, or anti-repo operations (refer to the purchase of securities at the same time, the signing of sale agreement back to the future, will work with the amount of securities sold) of the brokerage, the agreement can be immediately sold the securities, and then buy in the future to fulfill the contract. Securities firms engaging in buy-back operations can contribute to inventory management, reduce cost and increase market manipulation money market liquidity. Repurchase the securities can be said that a special form of securities lending. Repurchase agreement is actually received in cash as collateral for securities lending, securities lending, but also in other securities as collateral, or no collateral.
The securities repurchase market - other countries in In the U.S., bond repo market is significant. As of October 20, 1993, a government bond dealers repurchase the balance carried over 852 billion U.S. dollars, accounting for 93 years, three quarter of negotiable bonds, the balance of 29%. Among them, overnight and continuous repurchase (Continuing Repos, refers to both parties to the transaction at any time terminate the right of repurchase agreements) totaled 466 billion yuan, accounting for 54.7%, an additional 386 billion is a relatively long period of repurchase agreements. Dealers also carried out a Boji repurchase operations, the balance of 670 billion U.S. dollars over the same period. Securities lending is small, a dealer to lend a total of 5 billion U.S. dollars of funds at the same time to borrow 184 billion U.S. dollars.
The mid-80s, a number of debt providers have closed, and led to several savings and loan associations out of business, Ohio Deposit Insurance Corporation were subsequently closed down. Brokerage collapse The securities repurchase market One reason is that with the customer repurchase agreements entered into mourning after the agreement did not stock into customer accounts, but repeatedly using the same amount of securities repurchase transactions. Bonds in the two companies have a single dealer for operational, only engaging in the sale of government bonds, which carry the original regulation is extremely liberal. Problems that arose later, in 1986, was approved by the securities law to bond business into the Ministry of Finance, the Securities and Exchange Commission (SEC) under the supervision and management.
Other Western countries repo market, a much smaller scale in many countries, the securities repurchase and securities borrowing and tax laws and regulations or restrictions. In Japan, the repurchase transaction is the first transaction known as the (Gensaki). By the end of September 1993, the Japanese repo transactions balances (including non-government bonds) to 10.6 trillion yen (about 101 billion U.S. dollars), accounting for 9.8% of national debt balance. Among them, the short-term repo markets are more active in government bonds, government bonds accounted for 28% of the share of trading volume, securities firms to borrow money is the main square. Japan, the long-term government bonds repurchase as a form of securities transactions, and thus have to pay transaction tax. Financial institutions to sell securities transaction price rate of 0.01%, non-financial institutions to 0.03%; buy-back side and return to sell side sell securities are required to pay taxes, and thus the size of the long-term treasury bonds repurchase has been greatly limited. In 1989, Japan opened in the securities lending business (Bond Lending), because they do not satisfied transaction taxes, has developed rapidly, the stock market has become an important source of liquidity. Securities lending short term overnight; on the contrary, short-term business transactions are carried out in the first few, because the tax burden large, too expensive sake.
Germany's repurchase transactions different, banks borrow money subject to the provisions of repurchase to draw a certain percentage of reserves. As a result, has effectively eliminated the repo market in the country's existence. The London-based bond repurchase market in Germany is very private, which the majority of transactions are long-term bonds. The market and the German bond futures contracts are closely linked, the venue of the German companies are active.
French treasury bonds repurchase transactions were uncle and two high-level both within and abroad. Although we do not tax the domestic repo market to restrict, but not really of great hinder development of the market; by the end of 1993, the French government passed a law to address the eradication of such messages. As of December 1993, the domestic balance of approximately 200 billion francs repurchase, roughly twice the balance of overseas buy-back. Italy's domestic repo market is relatively well developed, long-term government bond trading are especially active. By the end of 1993, including the inter-bank repo transactions under repurchase the balance of 92 trillion lire.
In the UK, there is no bond between the private sector units in the market, only a limited borrowing gilts market, allowing market makers in Phnom Penh through the exchange currency broker to borrow gilts. In January 1994, the Bank of England to enable gilt-edged securities repurchase as standard open market instruments. Canada's bond repurchase market is very flexible, cross-border buy-back in 1992, abolished the tax on U.S. investors to participate in, a strong impetus to development of the market.
