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Reverse Repurchase Agreement
(redirected from Reverse Repurchase Agreements)

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Reverse Repurchase Agreement
A practice in which a bank or other financial institution buys securities or another asset with the proviso that it will resell these same securities or asset to the same seller for an agreed-upon price on a certain day (often the next day). Investors and financial institutions do this in order to raise short-term capital. Indeed, it is the equivalent of a short-term loan with the securities or asset serving as collateral. A reverse repurchase agreement is the same as a repurchase agreement, but from the perspective of the buyer rather than the seller. It is also called a matched sale transaction or simply a reverse.

reverse repurchase agreement
The purchase of an asset with a simultaneous agreement to resell the asset on a given date at a specified price. The result is simply a loan at a prescribed rate for a predetermined period while holding the asset as collateral. Also called reverse. Compare repurchase agreement.


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Outstanding loans, excluding those in reverse repurchase agreements, have reached PHP2.
The interpretation clarifies financial reporting for governments that pool money for investments when the pools have reverse repurchase agreements and says governments should report all assets and liabilities arising from agreements in the balance sheets of the funds that have the risk of loss on those assets.
The ED on reverse repurchase agreements would extend the securities lending disclosure on matching maturities (described earlier) to reverse repurchase agreements.
 
 
 
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