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the-repo-market-s-a-mess-what-s-the-repo-market-quicktake1. What’s the repo market?
It’s where piles of cash and pools of securities meet, resulting in more than $3 trillion in debt being financed each day. Repo is short for repurchase agreements, transactions that amount to collateralized short-term loans, often made overnight. Repo deals let big investors -- such as mutual funds -- make money by briefly lending cash that might otherwise sit idle, and enable banks and broker-dealers to get needed financing by loaning out securities they hold in return. A healthy repo market is more than the world’s biggest pawn shop: It helps a wide range of other transactions go more smoothly -- including trading in the over $16 trillion U.S. Treasury market.
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