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Are New Repo Participants Gaining Ground?

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Following the 2007-09 financial crisis, regulations were introduced that increased the cost of entering into repurchase agreements (repo) for bank holding companies (BHC). As a consequence, banks and securities dealers associated with BHCs, a set of firms which dominates the repo market, were predicted to pull back from the market. In this blog post, we examine whether this changed environment allowed new participants, particularly those not subject to the new regulations, to emerge. We find that although new participants have come on the scene and made gains, they remain a small part of the overall repo market.

Suggested Citation

  • Adam Copeland & Ira Selig & Anya Tarascina, 2019. "Are New Repo Participants Gaining Ground?," Liberty Street Economics 20190403, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednls:87323
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    File URL: https://libertystreeteconomics.newyorkfed.org/2019/04/are-new-repo-participants-gaining-ground.html
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    Keywords

    regulation; repo;

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets

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