The financial plumbing of the GCF Repo® Service

Paul Agueci, Leyla Alkan, Adam Copeland, Kate Pingitore, Caroline Prugar and Tyisha Rivas

Economic Policy Review, 2015, issue 2, 7-24

Abstract: The authors describe the ways that intraday credit was used to facilitate the settlement of trades before reforms to the tri-party repo settlement system. In particular, they focus on two main processes: the end-of-day settlement and the morning unwind. The authors then describe why this extension of intraday credit by the clearing banks is problematic, specifically pointing to concerns that a clearing bank may not be able to absorb the impact of a failing dealer. The authors also discuss various reforms to the tri-party repo settlement process, which, they note, are likely to influence the costs of settling GCF Repo transactions.

Keywords: financial intermediation; GCF Repo; tri-party repo reforms (search for similar items in EconPapers)
JEL-codes: E42 E58 G23 G28 (search for similar items in EconPapers)
Date: 2015
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