آخر تحديث - 21 ديسمبر 2020
A pension contract is a short-term loan structured as a sale of securities, with the seller agreeing to buy them back at a later date. In a pension agreement, the borrower (i.e. the seller) sells securities to the buyer (the lender) at a predetermined price higher than the price for which the securities were sold. This difference is the interest rate of the loan and is treated as such tax.” An open pension contract (also called on demand) works in the same way as an appointment period, except that the trader and counterparty accept the transaction without setting the due date. On the contrary, trade can be terminated by both parties by notifying the other party before an agreed daily period. If an open deposit is not completed, it is automatically crushed every day. Interest is paid monthly and the interest rate is reassessed by mutual agreement at regular intervals. The interest rate on an open pension is generally close to the federal rate. An open repo is used to invest cash or finance assets if the parties do not know how long it will take them. But almost all open contracts conclude in a year or two. A pension contract (repo) is a form of short-term borrowing for government bond traders. In the case of a repot, a trader sells government bonds to investors, usually overnight, and buys them back the next day at a slightly higher price. This small price difference is the implied day-to-day rate.
Deposits are generally used to obtain short-term capital. They are also a common instrument of central bank open market operations. Like many other corners of finance, retirement operations contain terminology that is not common elsewhere. One of the most common terms in repo space is “leg.” There are different types of legs: for example, the part of the retirement activity that originally sells security is sometimes called “starting leg,” while the subsequent buyback is the “close leg.” These terms are sometimes replaced by “Near Leg” or “Far Leg.” Near a repo transaction, security is sold. Pension agreements have a risk profile similar to any securities lending transaction. That is, they are relatively safe transactions, since they are secured credits, which are generally used as custodians by a third party. There are three types of retirement transactions that are used in the markets: Deliverable, Tri-Party and detained. This last point is relatively rare, while tripartite agreements are the most used by money funds.
Pension transactions are usually completed overnight, while a small percentage of transactions are due longer and is called term repo. In addition, some transactions are classified as “open” and do not have an maturity date, but allow the lender or borrower to mature the repot at any time. In a deliverable repurchase agreement, there is a direct exchange of cash and securities between the borrower and the lender. 2) The liquidity payable when the guarantee is repurchased When state-owned central banks buy back securities from private banks, they do so at an updated interest rate, called the pension rate.