reverse repurchase agreement


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Related to reverse repurchase agreement: Reverse Repo, Repo transaction

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.
References in periodicals archive ?
The Fund will limit its use of leverage from reverse repurchase agreements (whether or not these instruments are covered in accordance with 1940 Act standards) such that the proceeds therefrom to the Fund will not exceed 50% of the Fund's total assets (including the amounts of leverage obtained through the use of such instruments) at the time utilized.
The ED on reverse repurchase agreements would extend the securities lending disclosure on matching maturities (described earlier) to reverse repurchase agreements.
At first he didn't want to but agreed to "do a little research on the county's financial practices" and became concerned about the use of arbitrage, purchases of exotic derivatives and the use of reverse repurchase agreements.
Robert Sonnelitter, FASB project manager, explained the proposal "would permit offsetting payables and receivables representing repurchase agreements and reverse repurchase agreements only if they have the same settlement date, are executed with the same counterparty in accordance with a master netting arrangement, involve securities that exist in `book entry' form and settle on securities transfer systems that have the same key elements and operating characteristics as the Fedwire Securities Transfer System.
The above categories don't include any investments in pools managed by other governments, mutual funds or securities underlying reverse repurchase agreements.
The cash was injected through reverse repurchase agreements (repos) to ease a short term liquidity crunch.
Reverse repurchase and dollar reverse repurchase agreements (section R10).
Outstanding loans, excluding those in reverse repurchase agreements, have reached PHP2.
It had arranged eight-day tri-party reverse repurchase agreements.
Analysts believe that the tool, reverse repurchase agreements, also known as reverse repos, could be used to drain excess reserves.