Upon completion of this program, participants will be able to:

• Explain the economic role of Repurchase Agreements (Repos) in money markets and central banking.
• Describe the precise legal and operational mechanics of a repo and a reverse repo transaction.
• Analyze how central banks use repos for temporary injection and absorption of liquidity (OMOs).
• Manage the credit, market, and operational risks inherent in repo transactions.
• Determine appropriate collateral eligibility criteria, valuation, and haircut policies.
• Understand the legal enforceability and close-out netting provisions relevant to repo agreements.
• Apply the process of collateral substitution, optimization, and life cycle management.
• Compare and contrast the use of repos for routine OMOs versus large-scale asset purchase programs (QE).

• Central Bank Market Operations and Money Market Traders
• Commercial Bank Treasury and Securities Finance Professionals
• Fixed Income Traders and Repo Desk Specialists
• Risk Management and Collateral Management Teams
• Legal and Compliance Officers for Financial Markets
• Back and Middle Office Operations Staff for Securities Settlement

Repo trading simulation, Technical workshops on haircut and margin call calculations, Case studies on repo market failure (e.g., Lehman crisis), Group project on drafting a GMRA policy appendix, Discussions on regulatory impact on repo markets, Back office settlement process walk-through.

Unit 1: Foundations and Mechanics of Repos

• Defining a Repurchase Agreement (Repo) as a secured short-term loan.
• Participants in the repo market (central banks, commercial banks, hedge funds).
• The role of the General Collateral (GC) and Special Collateral markets.
• The legal distinction between a sale/repurchase and a secured loan structure.

• Using reverse repos to withdraw liquidity and sterilize monetary expansion.
• Using repos to inject liquidity and influence interbank rates.
• Operational protocols for executing repo tenders (e.g., competitive bidding, frequency).
• Repo settlement mechanics through Central Securities Depositories (CSDs).

Unit 2: Risk and Collateral Management

• Eligibility criteria for collateral in central bank repo operations (e.g., sovereign bonds, covered bonds).
• Valuation methodologies and frequency of margin calls.
• The rationale and calculation of **haircuts** to mitigate market and credit risk.
• The concept of collateral optimization and its effect on funding costs.

• Legal documentation: the Global Master Repurchase Agreement (**GMRA**).
• The legal enforceability of close-out netting in a counterparty default scenario.
• Managing counterparty credit risk and establishing exposure limits.
• The role of a Central Counterparty (CCP) in clearing and guaranteeing repos.

Unit 3: Operational and Policy Context

• Lifecycle management of a repo: from trade execution to maturity.
• Margin call procedures and managing collateral substitution.
• Technological requirements for real-time collateral management systems.
• The role of tri-party agents in collateral administration.

• The use of repos to maintain the central bank's interest rate corridor.
• Repos in the context of unconventional policy and the provision of market liquidity.
• Repos for foreign exchange reserve management and cross-currency funding.
• The impact of regulatory changes (e.g., Basel III, leverage ratio) on repo market functioning.

Unit 4: Advanced Repo Structures and Challenges

• Securities Lending agreements and their similarities/differences to repos.
• The mechanics of Tri-party Repo and its benefits for collateral management.
• Cross-currency and inter-jurisdictional repo arrangements.
• The use of repos to manage temporary market stress and dysfunction.