Demystifying the Repo Market

a deep dive into the "base layer" of repo

Every day in global finance, trillions of dollars are transacted in an obscure but crucial funding market: the market for repurchase agreements, or “repo” for short. The world has slowly shifted onto a secured standard, where shadow banks play an increasingly central role in the monetary system, using repos as a major wheel greaser. Uncovering the mysteries of the repo market has thus become crucial to understanding modern monetary plumbing.

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In this comprehensive subscriber special, we’ll demystify the seemingly intricate triparty repo market — the “base layer” of repo — unveiling in detail its origins, daily cycle, monetary plumbing, and flows, all mapped out using our trademark visuals. Let’s dive in.