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Collateralized
Derivatives
Equities
Repos
The repo market allows banks and investors to exchange high-quality assets, usually US government bonds, for cash funding. Borrowers then repurchase the assets for a slightly higher price at an agreed date, usually the next day, creating what is in effect a short-term loan. The market lets banks meet their short-term funding needs and is essential for the smooth operation of the dollar-based financial system.