US Repo Market Fact Sheet, 2019

An annual update and overview of the U.S. repo market.

A repurchase agreement (repo) is a financial transaction in which one party sells an asset to another party with a promise to repurchase the asset at a pre-specified later date (a reverse repo is the same transaction seen from the perspective of the security buyer). Repos can be overnight (duration one day) or term (duration up to one year, albeit some are up to two years and the majority are three months or less). The repo market enables market participants to provide collateralized loans to one another, and financial institutions predominantly use repos to manage short-term fluctuations in cash holdings, rather than general balance sheet funding.

In 2018, the average daily repo and reverse repo outstanding was $3.9 trillion, down 3.3% from 2017. The average daily repo oustanding totaled $2.2 trillion in 2018, down 2.1% y-o-y while the average daily reverse repo outstanding totaled $1.7 trillion in 2018, down 4.7% y-o-y.

Authors

  • Katie Kolchin, CFA
  • Justyna Podziemska, Assistant Vice President, Research
  • Robert Toomey, Managing Director, Assistant General Counsel

See Also