What is a repo?

By Deputy editor Tim Bennett Jul 19, 2012

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  1. Gideon

  (20 July 2012, 05:02AM)  Complain about this comment

  Tim - love your videos - brilliant introductions to the topics covered.

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  2. Jim C

  (20 July 2012, 12:11PM)  Complain about this comment

  I LOVE these videos! They explain things very well.
  
  'Reverse REPO" is a term that's bandied about.. maybe you could splice in a little segment explaining what this means?
  
  Thanks for all the great vids, Tim... they really do make the world of finance a great deal more understandable to 'the rest of us'.

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  3. Tim Bennett

  (20 July 2012, 03:28PM)  Complain about this comment

  Jim C - thanks...and the term "reverse repo" just refers to the position of the person the other end of a repo. So for example if I borrow cash in return for my securities I am doing a "repo" and my counter party - the person making the loan - is doing a "reverse repo".

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  4. Jim C

  (20 July 2012, 06:20PM)  Complain about this comment

  Thanks, Tim.

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  5. PatriotismTheLastRefugeoftheScoundrel

  (21 July 2012, 11:52AM)  Complain about this comment

  Tim Bennett has explained this very clearly, making it seem not particularly complicated, rather common-sensical in fact. So how is it that those clever people involved in these trades seem so unaware of the risk? Has "high finance" degenerated into global gambling without any accountability?

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  6. Tim.Bennett

  (22 July 2012, 10:42AM)  Complain about this comment

  PatriotismTheLastRefugeoftheScoundrel - you have got it in one! Sure these things can be made to sound more complicated by City folk trying to justify a bonus but then that's always been true. Now they are being found out!

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  7. A.Biswell

  (22 July 2012, 11:31AM)  Complain about this comment

  Germany is now increasingly looking as being the likely saviour of the Euro and hence the EU itself.
  
  The reason being that Germany has benefitted from a weak Euro in its export driven economy.
  
  However yesterday I heard that Deutsche Bank is leveraged 60 times V its assets , the biggest in Europe and perhaps the most leveraged bank in the world. Which if true means that the EU could be in deep trouble as the biggest bank in Germany could well be in major trouble soon itself.
  
  It would be interesting to know how much of this was REPO related ... it there any way of finding out ?
  
  Why do the firms auditing the accounts not check these ?
  
  Are there no rules regarding the amount of leverage V its assets that a bank can take on ?
  
  
  thanks
  
  a. biswell

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  8. Buddy

  (22 July 2012, 12:35PM)  Complain about this comment

  I thought Repo's only accounted for a tiny fraction of the financial high jinx of the investment banking world?
  
  A.Biswell makes a good point about the accountability of Banks and their positions of leverage, but alas the accountants & bosses, plus Politicians can not afford to have their positions exposed as the true horror of the financial world may start to be revealed.
  
  ie. They've all been living off make believe money for 10+ years....

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  9. James

  (22 July 2012, 03:44PM)  Complain about this comment

  Tim. Like many others I'd like to thank you for the great videos. Just one wee niggle: I don't seem to be able to downgrade the video quality any more (used to!) so get endless buffering, which makes things very hard to follow. Has something changed your end, or is it me? I live out beyond the Styx, so broadband is somewhat less broad here :-(

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  10. Donne Marshall

  (22 February 2013, 01:53PM)  Complain about this comment

  I am impressed with your videos as many others have said. Having watched your video on QE, You refer to the various protagonists failing to exchange money following a loss of confidence. Thus I infer that, if confidence could be restored there might be an improvement in the overall financial situation and a solution to the current crisis. Today’s news is full of assistance for the banks, just one of the elements in your video. Never is there mention of assistance for struggling firms and indeed private individuals, two of the other elements of your graphic. Significantly you said that private individuals often fail to spend because of the need to reduce private debt against fear of losing their homes. How would you think that massive long term low interest or interest free lending to individuals to help remove that fear might be a realistic alternative and/or complementary policy? I think that the emphasis on saving banks rather than the public has now become one of the major issues.

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