Examining the Global Master Repurchase Agreement - Financial Markets & ‘Repos’

Introduction

This virtual classroom seminar will provide an introduction to repurchase transactions (‘‘repos’’) as a form of short-term (secured) borrowing/lending and as a form of short-term financing, liquidity investment and liquidity management. We will discuss the Global Master Repurchase Agreement (‘‘GMRA’’), its brief history and current use and identify and discuss some of the most commonly negotiated provisions of the GMRA.

What You Will Learn

This live and interactive course will cover the following:

• Simple examples of a relevant transaction and its defining features
• Basic structure of the GMRA
• Role of Treasury Bonds
• Third party repos and role of clearing banks such as JPMorgan and New York Mellon
• Significance of the tenor
• Differences between term and open repurchase agreements aka ‘on-demand repo’
• GMRA history, definitions, examples, risks and key concepts
• Pricing policy and approaches
• Key defining elements such as short-term nature, implicit interest (‘repo rate’)
• Key users such as the U.S. Federal Reserve
• Introductions to the Standing Repo Facility (SRF) and the Overnight Reverse Repo Facility (ON RRP)
• Key definitions within the GMRA, such as ‘Purchase Price’, ‘Purchased Securities’, ‘Purchase Date’, ‘Repurchase Date’, ‘Repurchase Price’, ‘Price Differential’, ‘Pricing Rate’, ‘Transaction Exposure’, ‘Margin Ratio’, ‘Net Exposure’, ‘Net Margin’ and ‘Income Payments’
• Key mechanics and their uses such as ‘short squeezes’, ‘substitutions’, ‘defaults and close-out’
• Key industry terms such as ‘collateral’, ‘counterparty risk’, ‘far leg’, ‘general collateral (GC) repo’, ‘hair cut’, ‘held-in-Custody Repo’, ‘near leg’, ‘open repo’, overnight repo’, ‘overnight reverse repurchase agreement’ or ‘ONRRP’
• Key differences to collateralized loans
• Some the commonly negotiated provisions

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.